I may be the last one to have noticed that GM has a $21 handle. Wow.
The ongoing saga of this continues as a great lesson for investors. Bad news begets bad news. This stock has not been a proxy for the industrial sector or anything else for a long time. I have been writing this about GM from the start of the story.
I still do not think the company will disappear but the fate of the stock is less clear to me. I have no idea if the government will step in or not. I do not think the government should help the company but that may be the way to save the pensioners. If so, how do you say no to all of the people getting there healthcare through the company? As for the company if it were somehow reorganized, product lines cut, costs cut and so on and if that were tough on some, that would be ok. Tough but ok.
I'm glad I don't have to figure it out. I would tell investors to stay away from the common and the debt as no outcome would surprise me. I have been saying that all along.
Traders, on the other hand, will likely get a couple of good trades out of both even if the company completely dies in the end.
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3 comments:
A good answer to your question about GM can be found here:
http://globaleconomicanalysis.blogspot.com/2005/11/can-gm-be-saved.html
The post includes ideas for saving the pensioners and not getting government involved. Not my site, but one I read.
Have a stellar day!
I SAW GM RECOMMENDED ON FOX SAT.
TWO WEEKS AGO. AMAZING!! I HAVE
TO WONDER HOW MANY SHARES THE ANALYST WAS ABLE TO SELL ON MON.
A good portion of GM debt is actually GMAC loan debt: it would be interesting to see what is the true debt once GMAC gets sold out.
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