Скачать или смотреть आपके Stock का Price '0' हुआ तो? 0️⃣😥

#adigitalblogger #ambani #sintex
Can the stock price be zero?

Supply and demand determine the value of a stock in the market. Lower demand causes a stock to lose some value. But can demand go to nothing and will that lead to the stock price going to zero or nil?

Yes. How?

Technically, a company that has more debts and other liabilities than assets are worth a negative amount. And when such a company files for bankruptcy, it has to sell off all its assets to first pay the lenders.

And after this payment, if the company is left with nothing then its shareholders have lost all their investment and the stock price becomes zero and also company gets delisted from the exchange.

Let’s take an example to understand this better.

In 2020, Sintex filed for bankruptcy in court. Debt claims against it were:
Rs. 7,719 crore from financial creditors
Rs. 74 crore from operational creditors
Rs. 11 crore from employees

On the other hand, Sintex profits were negative, while its revenue was just 8 Cr. in that year.

Reliance industries came to the rescue and bought Sintex in a Rs 3,650 crore deal. But in that deal Reliance had clearly stated that “the existing shareholders would have their entire value written off.” This means that once the lenders or creditors are paid by Reliance, the stock price will touch zero and the company will be delisted.

The shareholder is the biggest losers in such a case. And there are similar other examples, like Amtek Auto, and Kingfisher Airlines. In America one of the famous examples is Enron.