What is Bankruptcy

Some people were infuriated that I was suggesting a Satyam bankruptcy few days ago and had no concern for its 50K employees. A bankruptcy is different from liquidiation - bankruptcy helps the assets of the firm operate under a new capital structure. It is one of the best ways to ensure that assets and employee jobs of an old firm survive. Look at Lehman - most of its employees are even today employed with Nomura and Barclays. 

Now that L&T and many other are looking forward to acquire the company (without having a reasonable handle on its balance sheet or legal liabilities), a Satyam bankruptcy might not be required. I think L&T is making a wrong decision, but it is a good decision for me. If everybody were to sit at home and not buy or sell stuff, the economy would collapse even more. I like animal spirits in other people - I just don't want animal spirits in me at this time.  

Did I miss buying Satyam that day (was it Jan 9) when it fell under Rs 10? Considering that the stock is now around Rs 50, that assessment would seem to be correct. One of my friends was pretty sure that the stock hits Rs 50 as buyers emerge. But then, there have been too many of Fannie, Freddie, Lehman, AIG etc last year - stocks that go down because of bankruptcy fears and then actually go down all the way to 0. I am not really unhappy that I didn't 4x in Satyam.