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 ...
What the HELL.
I don’t even recognize this country anymore.
They are dirtly, lowdown dogs.
The quintessential national socialist move.
I sent an email to my broker and that under no circumstances is he to buy any GM or Chrysler stocks or bonds.
Somehow I suspect that this kind of deal is a violation of existing Securities laws. But then laws are for the little people.
This whole corrupt, unconstitutional, criminal mess stinks to high heaven. Obama & Co should see prison time for this.
...and they are going to pay for your new GM car if you become unemployed. (Nevermind the idea that people whose job is at risk shouldn't be buying new cars.)
I buy trucks for my business.
Now I’ll strictly be a Ford customer...
Its basically a BK without the filing. The Obama Way. Interesting to see how they mix the reverse split with the DOW Average. No wonder they keep delaying the Stress Test results.
I just don’t understand how this is even legal. I’m just speechless. Obama’s audacity has literally taken my breath away.
This is not a notice of a meeting of stockholders and no stockholders meeting will be held to consider the matters described above. We are not seeking any consent, authorization or proxy from you, and no action by you is required.
What’s good for GM is good for America. and vice versa.
Makes me glad I have a used (and fully paid for) European car.
This is just the first daylight robbery of many IMO.
Obama and his criminal congress need to be jailed for this BS ! they are maddoff, enron, etc all rolled into one .
Our country is under attack by an illegitimate poser who is destroying our country as fast as he can before he's recognized for what he is and makes his peace with the Caterpillars.
That's about as rosy a forecast as I can come up with.
How is this legal?
Can’t current stockholders sue to stop this?
Tell me about it! $100, with low miles on it.
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