<#-- Rebranding: Header Logo--> <#-- Rebranding: Footer Logo-->

If a company that I have invested in goes private or bankrupt, what happens to my stock?

If I were to buy a stock of a company at $200, but a few weeks later the company goes private or goes bankrupt, what would happen? Would I lose that money? How would I get it back? And what if I bought many, many stocks of that company?

Stocks, Starting Out
Sort By:
Most Helpful
September 2018

If a publicly-traded company went private, shareholders would be bought out at a set price that they would have to vote on to approve.  The acquiring entity would obtain financing and the stock would continue to trade a percent or two below the deal price, up to the closing date.  Look for example at Dun & Bradstreet (DNB - 144.40).  A deal was announced last month for the company to be acquired by a private-equity consortium at $145 in cash per share.  The stock had closed at $122.80 the day before.  The stock immediately jumped to about 142.50 and has crept up slowly as the closing date approaches.  On closing you would be given cash in exchange for your shares.

If a publicly-traded company files for bankruptcy you would face a long and unhappy process.  (Never mind that companies trading at $200 per share rarely surprise the world by coming in to work one morning and filing Chapter 11.  There would have been trouble for years before they did that.)  However, if you are unlucky enough to hold stock in your portfolio in a company that files Chapter 11, the stock would certainly drop on that news, possibly by a lot, but continue to trade as investors sorted out the residual value they were likely to get in a reorganization.  I don't recommend investing in troubled companies, but there are professionals who make a very nice living doing exactly that.  

You ask "what if I bought many, many stocks of that company?"  That's kind of a stange question.  Usually a company has only one (or in a few cases two) classes of publicly-traded shares.  You can certainly buy "many, many" shares, but they would likely be all the same in nature and value.