posted on October 18, 2004 03:35:31 PM new
I grew up in Michigan, home of the Kresge Family and KMart. When we moved to Florida, I worked for KMart during my last two years of High School. So, when KMart went into Bankruptcy, I was drawn to purchasing 50 shares of their common stock. I was banking on their leadership to turn things around, and so far it looks as though they have rebounded, though I'm not too sure for how long. The irony of this story is what happened to the stock I purchased. I purchased the stock after KMart had filed for bankruptcy, and held that stock for about a year, until they emerged from bankruptcy. KMart, the day they emerged cancelled all of their common stock that was purchased prior and after they entered bankruptcy. My KMart stock became absolutely worthless. Since then, I have often wondered how a company can emerge from this and then turn their backs on their investors who helped finance their rebound, especially if this happened after their filing. I contacted KMart a month or so after I received the information, and received a form letter that didn't give any information regarding this. Since then, I have refused to ever step into another KMart and purchase one item from them for the rest of my life. I believe I, among thousands of others were betrayed.
posted on October 18, 2004 04:32:24 PM new
It's not just Kmart. This is a common, but evidently little known practice. I remember reading a financial advice column, where someone suggested that the person writing in sell their bankrupt airline company stock quickly (to someone who didn't know any better) before it became common knowledge that the stock was worthless.
posted on October 18, 2004 05:02:03 PM new
The new Kmart stock has done very well,but the guy behind it is more interested in selling its real estate then sprucing the stores to compete for business.Now i heard they brought in a guy from Yum brand,so may be it is time for them to run a business than stripping the assets.
-sig file -------Life is one big happy 'All You Can Eat' buffet .
posted on October 18, 2004 05:21:22 PM new
I find it absolutely crazy to allow a company which has already filed bankruptcy to be allowed to screw over investors that came in after they filed. Ironically, they reorganized during that time I had invested in them, only to pay companies like Proctor and Gamble, etc. and screw over the people that gave them ability to continue to do business. Very sad if you ask me. I can understand being able to file on debt owed prior to filing. That is what that is bankruptcy is for. Not to allow a company a free line of credit to investors out of.
posted on October 19, 2004 10:54:01 AM newBuy more, make it up in volume.
Was that your philosophy when you purchased Enron stock?
There's an old saying in Tennessee — I know it's in Texas, probably in Tennessee — that says, fool me once, shame on — shame on you. Fool me — you can't get fooled again." —George W. Bush, Nashville, Tenn., Sept. 17, 2002
---------------------------------- "Give it up for George W. Bush, the best friend international jihad ever had."
posted on October 19, 2004 12:43:00 PM newI have often wondered how a company can emerge from this and then turn their backs on their investors who helped finance their rebound
You didn't actually invest in "their" rebound unless the shares were new issue. You just bought the stock from another stockholder and K Mart got nothing from the deal.
The basic premise of common stock is that under a liquidation or bankruptcy, common shares are the last to be paid if there is anything left. If nothing is left, the shares are voided.
The current play on K Mart is not in retailing, but real estate. K Mart, like many others, can not compete with WallMart.
posted on October 20, 2004 03:08:30 PM new
Walking into our K-Mart and it is sure a change from the old one. Sales people are friendlier, store cleaner. They have some nice merchandise. Bankruptcy is not an ending. The company can regroup but I think if it is sold they will owe the bankruptcy court money...
When I walk into Walmart it is messy, and it seems like I am in a foreign country.
