Skip to comments.General Motors Is Headed For Bankruptcy -- Again
Posted on 08/16/2012 7:28:35 AM PDT by SeekAndFind
President Obama is proud of his bailout of General Motors. Thats good, because, if he wins a second term, he is probably going to have to bail GM out again. The company is once again losing market share, and it seems unable to develop products that are truly competitive in the U.S. market.
Right now, the federal government owns 500,000,000 shares of GM, or about 26% of the company. It would need to get about $53.00/share for these to break even on the bailout, but the stock closed at only $20.21/share on Tuesday. This left the government holding $10.1 billion worth of stock, and sitting on an unrealized loss of $16.4 billion.
Right now, the governments GM stock is worth about 39% less than it was on November 17, 2010, when the company went public at $33.00/share. However, during the intervening time, the Dow Jones Industrial Average has risen by almost 20%, so GM shares have lost 49% of their value relative to the Dow.
Its doubtful that the Obama administration would attempt to sell off the governments massive position in GM while the stock price is falling. It would be too embarrassing politically. Accordingly, if GM shares continue to decline, it is likely that Obama would ride the stock down to zero.
GM is unlikely to hit the wall before the election, but, given current trends, the company could easily do so again before the end of a second Obama term.
(Excerpt) Read more at forbes.com ...
but, but, but, but, he fixed it...this is totally “unexpected”. The little boy king don’t care, he’ll avoid GM like a birth certificate.
Let it die!
Buying GM stock is like tossing your money down the toilet.
Naxt time they get in a bind they will screw the stockholders again.
“Now I want to do the same thing with manufacturing jobs, not just in the auto industry, but in every industry.” - Barack Hussein Obama
Since the UAW now”owns” GM, does that mean its assets, including the pension fund and all the resorts, will be open to seizure to pay debts?
Excellent article. Thanks for the post!
Buffett will buy more shares in GM. He still owes the Govt for the bailout of Goldman and getting him on board just before it happened.
It was always assumed GM would go bankrupt again.
The first bankruptcy was to stongarm the bond holders and give the unions a “pump and dump” equity to pull cash out of the dead corporate body.
Now it will HOPEFULLY be an unvanished bankrupcy where the union contracts are dumped as they should have been in the first place.
BOHICA and FUBO!
I assume that will depend on who the president is.
Wonder if he has any now.
Da scheppert nix
My Mom traded in her Buick for a Nissan. My sister traded in her Pontiac for a Toyota. I traded in my Buick for a Subaru. My neice traded in her Chevy for a Kia. We used to be a GM family. We believe in the right to organize and have collective bargaining. Unions electing Democrats to plunder the public treasury to give money to the unions is criminal.
Forget that the 2013 Malibu is a step backward for GM. The reality is that leftists overwhelmingly buy foreign-branded vehicles. Add to that all the newly minted anything-but-GM crowd and you have a perfect storm. I hope the UAW is happy.
I'd like to think it might matter, but perhaps the Etch-A-Sketch will fall on the side of the taxpayers.
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