This is a mobile optimized page that loads fast, if you want to load the real page, click this text.

Can a share drop to $0.00?

Jump to new

shyguy

Joined
27 January 2011
Posts
108
Reactions
0
can a share drop to $0.00? what happens if it does? do they lose all of their securities? if you own shares are they lost forever?
 
While they are listed, no. A trade in shares involves a simple contract to buy and sell the share. There has to be a consideration.

There may be some traders saying that it has to be a bargain with no downside and good value at 0.1 of a cent with some no doubt still averaging down, but it is cactus and can not go any lower than the 0.1 of a cent while trading. Buy it at 0.1 of a cent and you can still (and probably will) lose 100% of your "investment"

Cheers
Country Lad
 
They can drop to nearly 0.00,

I have seen a case where people were so desperate to get rid of their shares they were selling them to a buyer off market for $20 for 1,000,000 shares which is $0.00002 per share.

I have also seen cases where people pay others to buy their shares just to right them off, for example you pay me $0.01 / share to buy your share of you for $0.001. just so you can write it off as a loss without waiting for the wind up which may take years.
 

Worthwhile service if you want to take the tax loss immediately,

https://www.delisted.com.au/buyworthlessshares.aspx

Cheers
Country Lad
 
as far as them remaining listed, is that something where they pull their listed securities but may continue operating as a company? or does this only happen if the company is closing shop?
 
Stay away from 5 Letter code stocks if you are not sure
 

The lesson here is you must understand exactly what you are buying whether it is a fp share, option, contributing share, renouncable or non-renouncible right or whatever and the implications and obligations.

Cheers
Country Lad
 
shyguy said:
as far as them remaining listed, is that something where they pull their listed securities but may continue operating as a company? or does this only happen if the company is closing shop?
Click to expand...

Yes shares can get delisted without the company going belly up. IDG is going through that now so you can see what is the actual process involved. CQO might be next if the hedge funds have their way.

Country Lad said:
The lesson here is you must understand exactly what you are buying whether it is a fp share, option, contributing share, renouncable or non-renouncible right or whatever and the implications and obligations.

Cheers
Country Lad
Click to expand...

Can't buy non-renouncible rights :
 
The simple answer is YES. There are plenty of company histories to prove it. Just watch CNP, it has every chance of being the next one. Companies that go broke and cant pay their debts go into liquidation. Shareholders are the LAST in the queue to get anything out of the wind up. CNP has much bigger debts than it has assets. Negative NTA. It may survive IF it milks the positive NTA of CER but I suggest that some of the financiers of the debt will end up with CNP's equity in CER.
 
okay... so what would then cause a company do delist there shares and cause investors to lose their investment, if the company is fundamentally strong?

i am only talking about FPO's by the way (3 letter codes)...
 
shyguy said:
okay... so what would then cause a company do delist there shares and cause investors to lose their investment, if the company is fundamentally strong?

i am only talking about FPO's by the way (3 letter codes)...
Click to expand...
In some (rare) cases, a company can be taken over, either by another listed company or by a private consortium. Once the takeover is done and dusted, the old code will disappear from the list of tradeable shares.
Example: WCU which will end up with Denisons. In a case like that, WCU holders are paid whatever the overtaker decided it's worth to them. And there are rules, enforced by ASX and ACCC, to make sure the affected shareholders aren't screwed too badly. The offer has to be "fair and reasonable".

But if a company goes into receivership, the investor holding the baby has only two options:

1. wait for refinancing or wind-up - whichever the case will be - before realising a loss by either selling or writing off.
(This case has two sub-options, depending; but that's a different story)

2. transfer the shares off-market to a willing taker; see delisted.com who offer to take your shares, provided You pay Them a transfer fee.
 
shyguy said:
okay... so what would then cause a company do delist there shares and cause investors to lose their investment, if the company is fundamentally strong?

i am only talking about FPO's by the way (3 letter codes)...
Click to expand...

Delist doesn't always mean losing your investment. It just means a company is no longer listed.

Like pixel pointed out takeover is a common 'cause' of delisting.

But there are other instances where share are delisted... E.g. TJN who is selling all her assets and return the cash to the shareholders.

It is very rare because essentially the mangement/board are giving up their jobs.

And like I said - look up IDG.
 
You must log in or register to reply here.

Similar threads

"Wives wives, kitchen knives" How long/how many times have you been married?!
2
Replies
29
Views
2K
farmerge
G
Superannuation : After Tax contributions
Replies
12
Views
2K
farmerge
D
Alternate Broker to Commsec for non-Resident Australian
Replies
12
Views
931
dinga
D
Fear and Greed Index
Replies
0
Views
528
Rosscoe62
R
My strategy/plan going forward
4 5 6
Replies
107
Views
14K
divs4ever
Menu
Log in
Register
Cookies are required to use this site. You must accept them to continue using the site. Learn more...