This would-be investor asked USA Today's Matt Krantz:
Q: If I invest in Circuit City stock , could I lose my entire investment?
Here's a shocker. Krantz replied:
Yes. Yes. Yes.OK, I get it. Don't buy stock with a "Q" at the end of its name.
Don't make any mistake about this. You don't want to be like scores of Kmart shareholders who were stunned when that retailer's reorganization completely wiped out their investments. ...
Even if a company emerges from bankruptcy, the SEC says, "in most cases the plan of reorganization will cancel the existing equity stock." ...
I cannot stress this enough. Please don't act surprised if you buy stock in a struggling company and find that your shares are worthless.
Krantz did write a more detailed analysis of Circuit City before the latest trouble. "But the basic analysis still holds," he says. "Investors beware."