GM 75 cents a share?

[nuconvert]

I’m not a pro either. lol
I just think it’s going lower ...
But what do I know?

[1rudeboy]

That’s what I meant: the poster’s better off going to the track. (Although he might be able to use the GM stock certificates as cheap wallpaper).

[FreedomFighter1013]

The way I understand it, in bankruptcy they will issue additional shares further diluting your holding. The reverse split maybe as much a 1,000 to 1, that is your share will be worth 1/1,000 of what it was. But, it’s not certain the bankruptcy judge will even allow that. He might wipe out all unsecured creditors, meaning all stockholders pre-bankruptcy get nothing...that’s my understanding.

[junkbond]

In the case of most bankruptcies, the stockholders do not recieve any enterprise value of the company. Creditor’s must be made whole before any payments are made to equity holders. In short, current GM stock holders will have their stock cancelled. (The ownership interest that the stock once represented will cease to exist.)

[usconservative]

That’s what I meant: the poster’s better off going to the track.

Spot on, better odds at the track.

[blau993]

Equity usually gets wiped out in a bankruptcy reorganization, so your proposed $500 investment is pretty dicey.

[bert]

Alright..... Check out the preferred HGM and other similar issues.

HGM rose 36% late this week

[junkbond]

Also, stockholders were not unsecured creditors. Unsecured creditors have a contractual claim on assets (though not the highest contractual claim.)Stock holders are considered equity.

Typical Priority of Claims Before OBAMA.

1. Secured Creditors
2. Unsecured Creditors
3. Preferred Equity
4. Common Equity.

New Priority

1. Political friends and associates
2. Secured creditors
3. Unsecured creditors
4. Preferred Equity
5. Common Equity.

[scrabblehack]

I thought there was a $1 per share minimum....they had talked about repealing or amending that rule recently...not sure if they actually did it.

If the rule is still in effect, apparently the price has to be below $1 for an extended period, not just one trading day.

http://rturner229.blogspot.com/2008/08/new-york-stock-exchange-delists.html

[LRoggy]

Never buy stock in a company that is heading into potential bankruptcy filing. Almost all the time the current shareholders are wiped out. This is an instance where the market is smarter than you are. The only big time buyers of this stock are the short sellers that decide to cover their position instead of waiting to see if the bankruptcy is sooner or later.

Time cost of money and other opportunities to short other stocks determines whether they keep their original short position going.

For example, if I short a stock at 5.00 and it goes to 0.75 does it really make sense to wait for 0.00? Or do you just take your profit and go on.

The only way this equity is saved is if the Chrysler bankruptcy filing is overturned by an appeal court, with the judge slapping down the Obama admin for overreaching by abrogating contract law. In that scenario the current Obama proposal for GM might be abandoned for something that is more friendly to GM shareholders.

But that is quite a long shot.

In all likelihood the GM stock is now worthless.

[Andy from Chapel Hill]

I bought some HGM this week @ $2.32/share. It closed yesterday at $2.50.

At least it will play in the New GM as part of the 10% for bondholders. The additional warrant for 15% of GM is what the Wall Streeters were looking for and they got it.

I have no idea if HGM is worth 50 cents or $5.00. It is a pure bet on my part to follow the private equity guys.

[Lucius Cornelius Sulla]

As I understand it the only reason the stock is this HIGH is because index funds have to own shares of every listed stock. That provides a little demand. Once the stock is delisted, or GM goes bankrupt (whichever comes first), the stock will be worthless.

[SAJ]

With respect, what you posted is factually inaccurate. Common share holders are most emphatically not unsecured debt holders. Unsecured debt holders are parties to a contract with the company (any company, not just GM) and have an enforceable claim on company assets under certain circumstances.

Shareholders are not parties to any contract with the company, and have no claim whatever on its assets, per se. The only property in which a shareholder might be a participant is in a proportionate share of a company's positive equity (i.e. assets minus liabilities). If this figure is 0 or lower, the shares are by definition worthless, although market sentiment (as here with GM) might place a positive value on the shares in anticipation of the assets once again exceeding the liabilities at some future date.

[M203M4]

GM may not fold, but that does not mean that investors and other private interests will get any return on investment or debt issued - it will just mean that enough tax dollars (stealthily or otherwise) have been shoveled into the burning pit for GM union employees to retain their salaries+benefits and for garbage fedgov-mandated two-seater coffins with the reliability of a 1983 Fiat to continue to tumble pathetically off the assembly lines.

When the movie GM: Fail Hard II hits screens, the government will probably tell stockholders to ESAD, or at best give them 10 cents on the dollar.

Would you go to a casino that retained the ability to change rules mid-game? If not, don't invest in companies that the federal government is currently leading around on a choke collar.

[newfreep]

This all means purchasing a GM or Chrysler will only help support uh-bama's communism.

Thanks, but no thanks!

[usconservative]

With respect, what you posted is factually inaccurate. Common share holders are most emphatically not unsecured debt holders.

Tell that to all the "market analysts" on Fox, MSNBC, Fox Business News, etc.. as that's the term they've been using for several weeks now.

The only property in which a shareholder might be a participant is in a proportionate share of a company's positive equity (i.e. assets minus liabilities). If this figure is 0 or lower, the shares are by definition worthless, although market sentiment (as here with GM) might place a positive value on the shares in anticipation of the assets once again exceeding the liabilities at some future date.

Incorrect. Once the stock hits ZERO, it is worthless. Once the stock hits ZERO and the company goes through bankruptcy, the stock is worth ZERO and the stockholder has ZERO recourse to retaining or obtaining any future value in that stock issue. By all accounts (again, of the "experts" on the business news networks) the shareholders in GM are about to get completely wiped-out in bankruptcy court. Anyone who purchases GM Stock now is a complete fool.

Say what you will, those are the facts.

[bert]

I have held it for quite while and sit in amazement at the gain this week. Maybe somebody knows something I don’t.

The perimeter held on Tuesday as not nearly enough of the real players held fast and did not accept the offered exchange. I follow, believing the judge/trustee is American and will uphold the law of contracts. My view is that the world financial system depends on that judgment

[refermech]

I just bought 500 shares, of course I bought at 1.25 a share.... but it was profit from some Ford stock so... nothing ventured nothing gained I guess.

[lurk]

My question all along is who is going to buy a car from Gummint Motors when they start rolling off the line?

They might sell some fleet vehicles to the US Govt, but are citizens really going to go for this? I see GM getting the treatment from citizens that Smith & Wesson did when they sold their soul to the Clintons.

Besides, with quality brands like Ford, Honda and Toyota available, who would be so dumb as to buy GM?

In the end, it would be healthier for all if this totally burned the unions and the administration and everyone learns a valuable lesson. But then, socialists aren’t able to learn.

[TurtleUp]

Try this game for better odds: