A Lesson about Real Estate Transactions From K-Mart of All Places

Article By Judi Barrett
kmart photo courtesy of flickr user robertstinnett

I’m going to show my past ignorance/stupidity here to make a point…

A few years ago, I bought some Kmart stock back before Kmart went bankrupt and went through reorganization, receivership, etc. I did not seek the advice of a professional when I purchased the stock.

I knew what I wanted, I got it at a good price and I bought it.  I won’t mention the sum that I paid, but it was not a small purchase.

Then Kmart declared bankruptcy and went into receivership. I kept my stock.. thinking that when they came out of the mess reorganized, my stock would be a good stock to own. 

First, again, I did not hire a professional…

Second, I bought some more of the Kmart stock to leverage the price that I had paid.
Thinking that when the dust all cleared, I was going to be in good shape with my Kmart stock..

photo courtesy of flickr user artemuestra

Kmart stock fell… fell.. fell.. so what did I do?

It couldn’t go anywhere in price BUT UP.. RIGHT?

WRONG.

My husband was doing some reading on the internet one night and happened across a very small obscure little article, not more than a short paragraph.. no big headlines..

it said that on such and such date, all Kmart stock would be null, void, dead, gone, not worth a cent…  That then the company would be reorganized and new stock would be issued.  All previous stock would have no value. 

DO WHAT?

HUH?

Sinking feeling. 

Surprisingly Kmart was still being traded at that time but for pennies on the dollar. I got busy and sold mine, a loss that really hurt my feelings… among other things. BUT whose fault was it?

Mine.

You know why?