Investing in damaged goods

Backing companies that are returning from bankruptcy is risky, but the returns can be very high

The company behind Readers Digest, the 90-year-old magazine often seen on hospital waiting room coffee tables, has become one of the more exciting stocks of the past year, due to the growing market in post-reorganisation equities.

These investments - sometimes called "post-reorgs" within the industry - are the stakes in firms that have emerged from bankruptcy. Although risky, they offer the potential for sizeable returns.

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Jamie Dimon Says Private Credit Is Dangerous—and He Wants JPMorgan to Get In on ItExternal link

Jamie Dimon Says Private Credit Is Dangerous—and He Wants JPMorgan to Get In on It