Expert: Steven Taylor - 4/22/2010

Question
Is there anything I can do with the 150,000 shares of JEDOF stocks I have sitting in my ING account?  I know the company changed their name to Steen River oil and gas before they bought Caribou Resources Corp..  How does this work, do they sell all these shares to investors then pay off their debt and close up or change their name...  So all the respectable people with their hard earned cash totally lose out that believed in these companies?  if thats the case, how is that fair to us at all?  Could you please help me out with some knowledge in maybe redeeming these stocks, possibly.. I have like 5 companies like this now in my portfolio..  Thanks a ton for any help...

Answer
Scott, it appears the JED shares are worthless. Except for taking a tax loss, there doesn't seem to be much else you can do with them, as they went bankrupt and cancelled them for no consideration.

Keep in mind that venture stocks are extremely risky - most don't survive. If you are a "buy and hold" investor, you will end up losing on just about all of them. The key to investing in this type of company is correctly evaluate the best opportunities and know when to sell. To have any hope of making that happen, you have to follow them very closely and review all their regulatory filings. If a company is non-reporting (i.e, the vast majority of US Pink Sheet and Grey Market companies) DON'T BUY THEM! EVER! Only buy shares of companies which are fully reporting and file their required financial and company information with government regulators. Companies that don't file are often less than respectable and/or outright stock scams, unfortunately.

JED, though, was fully-reporting and traded on the AMEX at one time. In their case, they overextended themselves and the business collapsed. Their filings and financial statements indicated there were in serious trouble long before they went bankrupt, but even so, it is tragic when the company fails and common shareholders end up with nothing. Everyone makes bad investment choices, and even though it is cold comfort to know that, the good investors learn from their mistakes and make better decisions next time out.