Bagholder
From Wikipedia, the free encyclopedia
The term bagholder is an informal slang term used in U.S. financial markets to refer to the shareholders left holding shares of worthless stocks.[1]
The shareholders could be caught up in a corporate bankruptcy and accounting scandal, as was the case with Enron and Worldcom, or the victims of a pump and dump scheme, in which naive and unsophisticated investors fall victim to e-mail spam, rigged stock tip forums, or other tricks used by stock touts to drive up the shares of worthless penny stocks.
The term has also been applied as a term of derision to real estate investors.[2]
The word is derived by combining shareholder with the expression "left holding the bag."
[edit] Holding the Bag
The expression "left holding the bag" originated in eighteenth century Britain and spread throughout the English-speaking world.[3] In this context, a person left holding the bag is stuck with the stolen goods, taking the blame from the police while the rest of a criminal gang escapes.
[edit] External links
- Holding the Bag on Bartleby
[edit] References
- ^ Richard Booth, University of Maryland School of Law (1997-11-01). Stockholders, Stakeholders, and Bagholders. Social Science Research Network. Retrieved on 2006-12-03.
- ^ "Still More Housing Bull," by Seth Jayson, The Motley Fool, Aug. 8, 2007
- ^ Q&A Left Holding the Bag. World Wide Words (2002-11-30). Retrieved on 2006-12-03.
