What would happen to Indy Mac Bank's stock ?

Question

Federal regulators closed Pasadena, Calif.-based Indymac Bank late Friday .

what would happen to Indy Mac Bank's stock ? they would be worthless?

Answer 1

The bank has been put under conservatorship by the FDIC. Generally, the FDIC only gurantees banks deposits (up to a certain limit, beyond which even depositors may lose their money). Then it tries to liquidate the assets or find new buyers of the bank operations. However, in most cases, and I'm quite sure it is the case of IndyMac, the value of assets is less than the value of its debt. So even debtholders (who are more senior and get paid first) are sure to not get fully paid. Shareholders are paid what is left after lenders (and depositors) are fully paid.

Sooo. If depositors and bondholders are at risk of not guetting fully paid back, you imagine how much will be left for shareholders.

Yep

Answer 2

Per the FDIC Website:

VII.  Priority of Claims

       In accordance with Federal law, allowed claims will be paid, after administrative expenses, in the following order of priority:

      1) Depositors

      2) General Unsecured Creditors

      3) Subordinated Debt

      4) Stockholders



And as was stated already, it is unlikely that there will be money leftover ro pay back all the stockholders.