Be kind and unwind: Finra warns about trading in Blockbuster shares
Recent runup in share price of bankrupt video retailer prompts caution from regulator
The Financial Industry Regulatory Authority Inc. on Monday issued an investor alert about possible manipulative trading in Blockbuster, Inc. (BLOAQ, BLOBQ).
The company’s name is actually BB Liquidating, Inc., Finra said, and has no further business operations or assets, even though its shares still trade.
Blockbuster, the former video-store and NYSE-listed company, filed for bankruptcy in September 2010 and sold almost all of its assets to DISH Network Corp., Finra said.
On September 29, the Securities and Exchange Commission suspended trading in BB Liquidating until October 13. Prior to the suspension, the class A shares had run up from around 7 cents a share to 35 cents.
Finra noted that recent internet postings said the company had exited bankruptcy.
“In fact, the company has not exited bankruptcy, and the company itself stated in a recent SEC filing that even though its shares continue to be quoted on the Pink Sheets, they may have ‘no value,’” the alert said.
“Finra cautions investors that bankrupt companies can be targets of online stock tips that can be confusing, inaccurate, misleading and in some cases fraudulent,” the alert added.
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