Skip to comments.GM details plans to wipe out current shareholders [securities fraud]
Posted on 05/05/2009 9:06:48 PM PDT by 2ndDivisionVet
General Motors Corp on Tuesday detailed plans to all but wipe out the holdings of remaining shareholders by issuing up to 60 billion new shares in a bid to pay off debt to the U.S. government, bondholders and the United Auto Workers union.
The unusual plan, which was detailed in a filing with U.S. securities regulators, would only need the approval of the U.S. Treasury to proceed since the U.S. government would be the majority shareholder of a new GM, the company said.
The flood of new stock issuance that could be unleashed has been widely expected by analysts who have long warned that GM's shares could be worthless whether the company restructures out of court or in bankruptcy.
The debt-for-equity exchanges detailed in the filing with the Securities and Exchange Commission would leave GM's stock investors with just 1 percent of the equity in a restructured automaker, ending a long run when the Dow component was seen as a bellwether for the strength of the broader U.S. economy.
GM shares closed on Tuesday at $1.85 on the New York Stock Exchange. The stock would be worth just over 1 cent if the first phase of GM's restructuring moves forward as described.
Once GM has issued new shares to pay off its debt to the U.S. government, bondholders and its major union, it said it would then undertake a 1-for-100 reverse stock split.
Such a move would take the nominal value of the stock back to near where it had been before the flood of new shares. But in the process, GM's existing shareholders would see their stake in the 100-year-old automaker all but wiped out.
(Excerpt) Read more at globeinvestor.com ...
Buh-bye GM! Your only possible buyers are Code Pink, DailyKos, and MoveOn.org.
You sold your soul to a frikin’ TELEPROMPTER! lol!
“Jaguar,” “Nissan,” “Honda” and “Toyota” don’t rhyme either. I took my Jeep to the levee but the parking brake didn’t hold and it almost rolled into the river.
Maybe you should've driven it to the fjord.
Really now? Can you please post the alterante sources that show that? Thanks in advance.
It's been a tough crowd tonight so I'll take it.
Ah..My levee days are over. I’m all Honda. No more breaks.
“The Nazis would have never dared this type of thing this early on in their reign.”
Shocking, isn’t it?
“I dont even recognize this country anymore.”
It’s over. Now we have to try to dig it up and resurrect it.
“This whole corrupt, unconstitutional, criminal mess stinks to high heaven. Obama & Co should see prison time for this.”
Heh, heh. Thank you. I’ll be here all week. And don’t forget to tip the waitresses.
“Now Ill strictly be a Ford customer...”
You and me both, friend. In fact, I just bought a Ford pickup about a month ago.
Bankruptcy judge mulls Chrysler plan, GM talks loom
By Emily Chasan and David Bailey
Tuesday, May 5, 2009; 7:37 PM
Secret Service, Secret Service, Secret Service...
The levee road here is a shortcut to get into downtown while bypassing the other bridges in the area.
Can’t use it when it’s rained, though.
UPDATE:GM:Hasn’t Reached Agreement For Treasury Debt Conversion
“The auto maker said in the filing it may offer one share of new stock for every 100 currently held by shareholders in a reverse stock split as part of the deal.”
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.