Money: Beware the Bargains

Bottom fishing for bankrupt stocks? Watch out! They're usually worthless

Bottom fishing for bargains in the stocks of distressed companies is a surprisingly popular sport, but careless investors are likely to reel in something rotten.

An active fraud investigation hasn't kept buyers from snapping up millions of shares of embattled HealthSouth. In Chicago an investment club took a flyer on bankrupt UAL, the parent company of United Airlines, believing that the stock was set to soar. More than 57 million shares of bankrupt WorldCom were traded last Thursday on news that WorldCom had reached a revised settlement with the Securities and Exchange Commission that will give some shareholders stock in the...

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