How much is worthless stock worth? Amex, in reversal, keeps trading Wang

March 29, 1993|By New York Times News Service

Stock in Wang Labs is all but worthless, a fact that the company confirmed when it filed its plan to emerge from bankruptcy. Responding to that plan, the American Stock Exchange announced plans to stop trading the stock at the end of March.

But that was before the Amex realized just how much volume a worthless stock can generate. Friday, the exchange said it would keep trading the shares.

"We saw a significant amount of volume taking place and felt that investors would be better served by having it take place in our marketplace," said Jules Winters, the exchange's chief operating officer.

Wang is a once-proud computer company that fell behind the technology curve and went broke. Now it is out of the business of making computers but hopes to prosper as a provider of software and computer services. For shareholders, however, their portion of renewed prosperity, if there is any, will be very small.

Under the plan filed on March 16, the two existing classes of common stock will be exchanged for warrants. Those warrants will enable the owners to buy new shares at a price yet to be determined. There is not enough information available to fix an exact value, which is certainly not much.

"The initial trading price will probably be pennies rather than nickels or dimes," Frank Ryan, a Wang spokesman, said.

But it has become commonplace for bankruptcy stocks to trade far above their value, a result of speculation by uninformed investors and, some suspect, of promotion by unscrupulous brokers. Wang is no exception. Its class B shares ended trading on Friday at 44 cents, up 6 cents, while class C shares closed at 75 cents, up 19 cents. The two classes are treated identically and will be worth the same amount under the plan.

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