# CDO and Nonpositive Equity Questions

At 10:30, the video claims that a stock price goes to \$0 when a company has \$0 equity. Does this actually happen in the real world? The video seems to state that this doesn't imply you can pick up the stock for free, but that's what a \$0 stock price sounds like to me. Since the value of a stock is indeed its equity divided by the number of existing shares, how does this case play out in companies that have \$0 or negative equity?