Short sales & bankruptcy
If I shorted the equity of a company, and it went bankrupt - what would happen exactly? How would the short be covered, or would covering be unnecessary?
If I shorted the equity of a company, and it went bankrupt - what would happen exactly? How would the short be covered, or would covering be unnecessary?
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could still cover, most equity still trades with some nominal share price (and it's not necessarily the case that the equity gets completely wiped out, although many times it is the case).
A lot of times they trade OTC as a shell company for awhile with the intent of doing a reverse merger so the new company can take advantage of the old company's NOLs and go public without having to go through an IPO
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