Stub stock

Stub stock,

Definition of Stub stock:

  1. Shares selling at drastically reduced market price because either (1) their issuing firm has negative net worth after taking on a huge debt (due to a leveraged buyout or recapitalization), or (2) has paid an unusually large dividend. Stub stock is highly speculative, but also has extraordinary potential for gain if the issuer prospers.

Meaning of Stub stock & Stub stock Definition