Bagholder
{{short description|Slang for shareholder left holding worthless stocks}}
In financial slang, a bagholder is a shareholder left holding shares of worthless stocks.{{cite journal |last=Booth |first=Richard A. |title=Stockholders, Stakeholders, and Bagholders (or How Investor Diversification Affects Fiduciary Duty) |journal=The Business Lawyer |volume=53 |issue=2 |year=1998 |pages=429–478 |jstor=40687791 |ssrn=149731 }} The bagholder typically bought in near the peak, when people were hyping the asset and the price was high, and held it all the way through steep declines, losing a large amount of money in the process.
It can also refer to the holder of other assets and financial instruments that become worthless, such as the junior bonds of a defaulted company or the coins of a failed cryptocurrency. The word is derived by combining shareholder with the expression "left holding the bag."
Examples
The shareholders could be caught up in a corporate bankruptcy and accounting scandal, as was the case with Enron and Worldcom, or be the victims of a pump and dump scheme, in which 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.{{Citation needed|date=April 2017}}
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 said to be the bagholder.{{cite web|url=http://www.davemanuel.com/investor-dictionary/bag-holder/|title=Bag Holder - What Does It Mean?}}
{{anchor|Holding the bag}}Etymology
The expression "left holding the bag" originated in eighteenth century Britain and spread throughout the English-speaking world.{{cite web|title=Q&A Left Holding the Bag|url=http://www.worldwidewords.org/qa/qa-lef1.htm|publisher=World Wide Words|date=2002-11-30|accessdate=2006-12-03| archiveurl= https://web.archive.org/web/20070103051159/http://www.worldwidewords.org/qa/qa-lef1.htm| archivedate= 3 January 2007 | url-status= live}} 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 fool's errand known as a snipe hunt,{{cite book|last1=Partridge|first1=Eric|title=A Dictionary of Slang and Unconventional English|date=2006|publisher=Routledge|isbn=9781134963652|page=560|url=https://books.google.com/books?id=IAjyQdFwh4UC&dq=holding+bag&pg=PA560|language=en}} a practical joke in which an unsuspecting newcomer is led outdoors and left "holding the bag" in which to catch a creature that does not exist.{{cite book|last1=Brunvand|first1=Jan Harold|author-link=Jan Harold Brunvand|title=American Folklore: An Encyclopedia|date=1996|publisher=Taylor & Francis.|location=New York|isbn=0-815-30751-9|pages=233, 1233|url=https://books.google.com/books?id=oJuvqhxFXH8C&q=snipe+hunt}}{{cite book | last = Palmatier | first = Robert Allen | title = Speaking of Animals: A Dictionary of Animal Metaphors | date = 1995 | publisher = Greenwood Publishing | location = Westport, Connecticut | page = 357 | isbn = 0313294909 | url= https://books.google.com/books?id=kSr4fO2zYrIC&dq=holding+bag&pg=PA357}} As an American rite of passage or haze, it is often associated with summer camps and groups such as the Boy Scouts.{{cite book|editor1-last=Fee|editor1-first=Christopher R.|editor-link1=Christopher R. Fee|editor2-last=Webb|editor2-first=Jeffrey B.|title=American myths, legends, and tall tales : an encyclopedia of American folklore|date=2016|publisher=ABC-CLIO|location=Santa Barbara|isbn=9781610695671|page=514|url=https://books.google.com/books?id=kXnEDAAAQBAJ&pg=PA514}}
See also
References
{{Reflist}}
External links
- [https://web.archive.org/web/20070821150524/http://www.bartleby.com/59/4/leftholdingt.html Holding the Bag] on Bartleby
- [http://investorshub.advfn.com/boards/read_msg.aspx?message_id=51974047 HESG X-CEO/ Tom Gaffney replied "We Are All The Bagholders" - Health Sciences Group Inc.]