Bagholder

In U.S. financial slang, a bagholder is a shareholder 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 word is derived by combining shareholder with the expression "left holding the bag."

Real estate investment

If a worthless property is bought with the idea to sell it for a higher price, the gullible person who is stuck owning the property is the bagholder.[2]

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.

The phrase is also used in association with the practical joke known as a snipe hunt,[4] in which an unsuspecting newcomer is led outdoors and left "holding the bag" in which to catch a creature that does not exist.[5][6] As an American rite of passage, it is often associated with summer camps and groups such as the Boy Scouts.[7]

See also

References

  1. ↑ Booth, Richard A. (1998). "Stockholders, Stakeholders, and Bagholders (or How Investor Diversification Affects Fiduciary Duty)". The Business Lawyer. 53 (2): 429–478. JSTOR 40687791. SSRN 149731.
  2. ↑ "Bag Holder - What Does It Mean?".
  3. ↑ "Q&A Left Holding the Bag". World Wide Words. 2002-11-30. Archived from the original on 3 January 2007. Retrieved 2006-12-03.
  4. ↑ Partridge, Eric (2006). A Dictionary of Slang and Unconventional English. Routledge. p. 560. ISBN 9781134963652.
  5. ↑ Brunvand, Jan Harold (1996). American Folklore: An Encyclopedia. New York: Taylor & Francis. pp. 233, 1233. ISBN 0-815-30751-9.
  6. ↑ Palmatier, Robert Allen (1995). Speaking of Animals: A Dictionary of Animal Metaphors. Westport, Connecticut: Greenwood Publishing. p. 357. ISBN 0313294909.
  7. ↑ Fee, Christopher R.; Webb, Jeffrey B., eds. (2016). American myths, legends, and tall tales : an encyclopedia of American folklore. Santa Barbara: ABC-CLIO. p. 514. ISBN 9781610695671.
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