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  • Category: Stock Market

    How to know if any stock listed company is bankrupt?

    Wondering whether any stock listed company is bankrupt or not? Check out the answers from the experts in the field of stock market.

    How to know if any stock listed company is bankrupt? I have penny stocks and some of them not performing well. I am waiting for them to get raise. There is no news of them if they are doing well or any court case going for them. How do I know if they are bankrupt and what SEBI can do for shareholders of such company?
  • #141285
    Doubts about a company should arise when:
    1. Shareholder does not get any dividend
    2. The registered share holder is not getting any information or report about the company, including the notice of AGM
    3.The shares are not traded in any stock exchange or very rarely traded
    4.The market price of the share does not change for a long period or is on gradual ,decline.

    One can know about the company by searching in the stock exchange web sites or the financial websites which give such services . We can also take up with the Registrar of Companies and stock exchange to see if the company has filed any data and details required as per the stock exchange rules and company Act.

    A general suggestion here is that unless one is very experienced and expert in stock trading matters, it is better to keep away from penny stocks. It may be just fluke that one of them may give some good profit sometime as a one time wonder. There can be some penny stock companies who may genuinely grow up due to products change, management change, financial infusion et., but then that will gradually show up in its activity and reports.

    When a company gets liquidate shareholder is the last person to get something. He may totally lose his investment generally.

  • #141310
    When the company goes bankrupt, the listing on the market gets removed. No market keeps the bankrupt companies. So that's the basic part about any company listed in the stock market. However you may find that penny stock companies usually have very low expansion rate. They usually work in loss or sometimes work on nominal profit. Buying stock for penny stock companies is same as doing the crowdfunding on internet for project which doesn't give you much return. In order to avoid investing into company that is penny stock and has indication of slow growth.

    1. Avoid investing into penny stock at first place.
    2. See the company listing in stock market.
    3. Check company growth history in their official site or through stock market data.
    4. Keep inquiring about the company if they are into profit or not.

    This should give you some headstart on whether or not to avoid penny stock companies.

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