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Does a company automatically get delisted from stock exchanges when it goes bankrupt? Or can a defunct company's shares continue to get traded as essentially a form of cryptocurrency?

Normally negative news about a company will cause investors to sell until the share price approaches zero just as the company fails. But what if investors absolutely refuse to sell (for whatever irrational reasons) and the stock of a dying company remains artificially high?

This question was inspired by the recent intriguing events around Gamestop and AMC. Those companies may not be close to bankruptcy yet but it makes one wonder how far the absurdity can go.

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Bankrupt companies' shares can continue to trade. The stock exchange adds a 'Q' to the end of the ticker as a warning. Shares can hold value if the creditors are, unexpectedly, fully paid back in the bankruptcy, or if creditors agree to give something shareholders to get their support. Shares can hold substantial value if the company is clearly worth more than its debts and liabilities, but files bankruptcy and seeks protection from creditors anyway.

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There's a difference between a company going bankrupt versus a company that is in bankruptcy proceedings.

If it's Chapter 7 bankruptcy, the company stops operating, it liquidates all assets to pay its debts and then the company is history and disappears from existence.

OTOH, if it files Chapter 11 bankruptcy, the company continues to operate as it attempts to restructure and renegotiate its debts.

Each exchange has initial listing requirements as well as requirements for remaining listed. For example, if a stock on the NYSE closes below $1 for 30 consecutive trading days, the NYSE initiates the delisting process (there are other listing requirements as well).

During bankruptcy proceedings, the exchange will add the letter "Q" to the end of symbol.

If the company continues to exist but is delisted, it will trade on the Pink Sheets via over-the-counter (OTC).

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This is an intriguing question. Stock market decision making can be highly irrational. Amazing how although the efficient market theory holds, bubble assets like this one: https://seekingalpha.com/news/3650852-mistaken-identity-company-signal-advance-plunges-after-spike-in-last-days (and the one you are reffering to, AMC) crop up from time to time in the equity market (I am not familiar with AMC stock though).I guess the company will eventually deliist owing to cost of continuing to be listed on an exchange. I can imagine the investors who bought this stock (Signal advance) at a premium in the days not long after Elon's tweet. Intrestingly, I bought Steinhof (now a penny stock following the accounting scandals) at an all time record low price of R1.62 (translate to US$ to see how almost worthless this, South African Rand). Steinhoff remained listed throughout the scandal storm and I held on to my stock holding. A recent development now, regarding a possible stock sale of their Eurpean based subsidiary has rubbed positively on the stock price and it has now soared 90%(Ironically the same % it tanked with post the scandal revelations) month to month, and this has in turn rubbed off very positively on my equity portfolio.

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