In eighteenth century British slang, a person who was "left holding the bag" was the chap who was stuck holding onto the stolen goods, and thus being arrested, while the rest of the nefarious criminal gang escaped.
As adapted (and rearranged) for U.S. financial slang, a bag holder is a shareholder left holding shares of worthless stocks.
Related or Semi-related Video
Finance: What is non-voting stock?4 Views
finance a la shmoop- what is non-voting stock? hmm well it's stock that doesn't
vote. bet you're shocked to hear that. most people need a PhD in finance to [stock wears an "I didn't vote" sticker.
understand that notion. but really that's it in most cases common stock carries
with it the right to vote. and in fact it's the common shareholders who elect
the board of directors. but every now and then a potentially hostile investor
comes along and buys or wants to buy a big chunk of stock in a company. well the
amount might be a block large enough to elect that potentially hostile investor
slate or the group of people that investor wants to place on the board to
represent her evil intentions .when that happens companies will often create a
class of common stock similar in every way to its normal common only with its [stock checklist of privileges listed]
voting rights stripped away .that way the investor can own an economic interest in
the company but not monkey with the board.
Up Next
What rights does a public stockholder have? Common shareholders elect the board of directors. They vote. They have the right to quarterly financial...
What is Cumulative Voting? When public companies have ballots for shareholders to vote for board members, shareholders have a total number of share...
How does a board of directors function? Public companies, as well as some private corporations and non profit groups, have a board of directors. Us...
What are Debt Service and Debt Service Ratio? Debt service is the amount of funds needed by a borrower to successfully cover interest and principal...