Trading in the shares of old General Motors, now known as Motors Liquidation Co. , is slated to restart Wednesday, but regulators are warning investors that the shares have no value. In a notice titled, "Investing in a Bankrupt Company: A High Risk Venture," the Financial Industry Regulatory Authority, or Finra, and the Securities and Exchange Commission said trading in the shares, which was halted Friday, will restart on Wednesday. Finra said it halted trading because it perceived "a potential widespread misunderstanding that the trading in this security may have been related to interests in the new General Motors," which in fact doesn't trade publicly. The misperception "may have the potential to cause major disruption to the marketplace and/or significant uncertainty in the settlement and clearance process," the agency said. In a further effort to make clear that the public shares do not represent an interest in New GM, shares of Motors Liquidation will trade under a new symbol, ( MTLQQ)MTLQQ, replacing the symbol ( GMGMQ). To be clear, the stock is worthless. It may trade up and down as charlatans, four-flushers, flimflammers, fools, quick-buck artists and speculators seek short-term trading gains, but it remains worthless. In the alert, the regulators warned investors that "holding shares of any company involved in a bankruptcy, or buying shares in a bankrupt company in the hopes that those shares will surge in value down the road, are highly risky courses of action." Furthermore, "companies in bankruptcy are often the subject of rumors in fax or email newsletters, Internet message rooms or on Web sites offering the stock tips," the regulators said. As recently as last week, they said, "Newsletters and other promoters have touted the purchase of the stock."
In most bankruptcies, the company's plan of reorganization cancels the existing equity, enabling a bankruptcy company to issue new shares in order to pay existing debt to creditors. In general, by the time these creditors are paid a fraction of what they are owned, nothing is left for holders of common equity. Ford ( F) is the only U.S. automaker that is publicly traded. Shares of New GM are expected to become available to the public in 2010.