Even if they don't go bankrupt, the equity has a much higher risk. The gov't could take massive warrants or preferreds etc. in exchange for needed money. That sort of dilution can be profound. Look at a 10 year chart of AIG. Yahoo chart says all time high was 1971 (by eye), currently trading at 23. Of course the stock was never actually trading at almost 2000/share, that's just the dilution factored in.