When a company is delisted on the nasdaq what happens when it gets reinstated? Do the shares stay the same?

For example, let’s say I own 500 shares of DEF. DEF files for bankruptcy and is therefore delisted. When it re-emerges from bankruptcy and gets reinstated by the nasdaq, will my 500 shares still be valid? If I had 500 shares before it got delisted, will I have 500 shares after it gets reinstated?

The type of bankruptcy filing you are talking about is a Chapter 13 bankruptcy. Chapter 13 is used by small businesses to delay and reduce the amount of payments to creditors over a period of time; this is known as a Chapter 13 Plan, or an individual reorganization.

A bankruptcy court will evaluate if a reorganization plan is even possible. If it is, all financial decisions must be approved by a representative of the court, a reorganization specialist. Some assets are liquidated and creditors are paid first.

To answer your question, no. You shares will most likely become worthless. Think about it. You are classified as an owner in the company when you are a shareholder. If a company issues shares and has many shares outstanding, and this was done to raise money for the company, all of the shares must be terminated by necessity. Creditors are who is important, not shareholders/owners. The bankruptcy court will usually approve a new issuance of shares and then an exchange value for all existing shareholders. The terms are never favorable to shareholders. What the bankruptcy court is doing is taking some of the money shareholders (owners) put into the company and are paying it out to creditors. So you might be lucky to get 1 share for every 10 existing shares you own. A new ticker symbol is created with a call letter at the end to indicate the company is going through a Chapter 13 reorganization plan.