answersLogoWhite

0


Best Answer

Stockholder's deficit represents a negative book value of a publicly traded company, i.e. the company has greater liabilities than assets (It owes more than it owns). Though investors holding stock in a company reporting a stockholder deficit aren't responsible for the debt, they have a lower (but not zero) chance of seing a short-term return on their investment. Stockholder's equity or deficit can be found in (among other places) the balance sheets of annual 10-k SEC filings. Go to www.sec.gov -> "Filings & forms (EDGAR)" -> Search for Company Filings -> Companies and Other Filers, then Enter ticker symbol -> search form form type "'10-k" -> download the 10-k for the year you would like to research. This information is valid as of Feb 21 2008. If a company you would like to invest in (or already own shares of) has a negative book value, it could still be a good investment. If the overall business model is strong, the price is low but short-term events have created significant, but one-time or short-term losses, the stock could be a good value buy. Also, a company might take on a debt to go after a new market. Stock in such a company might be a good growth purchase. In sum, a reported shareholder's deficit isn't necessarily indicative of a poor investment; it should be taken into consideration with other factors to gauge potential future value. Information contained in this post represents the opinion of the author and may contain inaccuracies and/or ommissions. No information contained should be used as the primary basis for an investment decision. Please seek professional consultation before investing.

User Avatar

Wiki User

16y ago
This answer is:
User Avatar

Add your answer:

Earn +20 pts
Q: What is stockholders deficit?
Write your answer...
Submit
Still have questions?
magnify glass
imp