Kmart Shoppers Find a 'Bargain'

Zilch, zero, nada. That's what shareholders typically get when companies reorganizing under Chapter 11 emerge from bankruptcy.

Yet one of the hottest stocks the past few days has been discount retailer Kmart (KM Quote), which only a week ago became the largest-ever retail bankruptcy and the nation's second-biggest Chapter 11 case. Kmart has more than doubled since the filing, trading at $1.57 around early afternoon Wednesday.

Even as the Dow Jones Industrial Average fell almost 250 points Tuesday, Kmart shares jumped 33%. The run-up came after the company, based in Troy, Mich., said that vendors had resumed shipping goods and a judge had approved a $2 billion rescue package from a group of banks. And it came a week after Wall Street firms, noting the steep odds against the stock retaining any value, stopped covering Kmart. ...