Bankrupt airline proves to be a winning lottery ticket

I’ve long been puzzled about why investors pour good money into bankrupt companies. General Motors, Trans World Airlines and many others saw inexplicable stock-price rallies weeks or months after court filings made clear that the shares would have no value. The recurring trading pattern seemed to have no rational explanation — until last month, when American Airlines announced that it was merging with US Airways. Shares in American’s parent, AMR Corp., lost 84 percent of their value on the day AMR filed for bankruptcy in 2011. They fell to 26 cents apiece, and they stayed in the bargain basement for most of last year. It looked like another no-hope stock, a sucker’s bet. rea more at:http://www.stltoday.com/business/columns/david-nicklaus/bankrupt-airline-proves-to-be-a-winning-lottery-ticket/article_3c788aba-8c87-5127-968a-108364877486.html