Link to a good op-ed on this: http://directorblue.blogspot.com/2010/12/tres-awesome-did-gm-pull-off-its-ipo-by.html
Posted on 12/01/2010 5:12:08 PM PST by Kaslin
GM's recent public offering has been touted as a huge success by the administration. The president announced that the tough decisions made during his administration were beginning to pay off. He also indicated that the "American taxpayers are now positioned to recover more than my administration invested in GM, and that's a good thing."
In analyzing the use of proceeds of the two securities offered by GM (GM), the common stock and the mandatory convertible preferred stock, it is interesting to note that the company will not receive any funds from the offerings and, in fact, will deplete its current cash position by an additional $2 billion to complete the deal. All the proceeds will be used to pay its pension obligations as well as repay the U. S. Treasury.
At the same time it is depleting its cash by $2 billion and, moreover, in the same disclosure statement filed by GM it notes that it requires over $12 billion in 2010 for engineering and capital spending and $4 billion for debt repayment through 2014.
So, let me make sure I understand. Someone invested in a company to use the entire proceeds plus $2 billion more to repay creditors and repay shareholders when the company's need for cash is so great. The lack of logic is concerning. Perhaps a political motive to repay government funds trumped sound business judgment?
These red flags and perceptions of impropriety during the GM bankruptcy and emergence from bankruptcy are mind-boggling. If this company were not owned by the U. S. government, I am certain the SEC would begin an investigation of the company.
Despite U.S. government ownership, the red flags are flagrant.
(Excerpt) Read more at investors.com ...
The devil is in the details.
The VOLT is gonna be a HUGE success!
Link to a good op-ed on this: http://directorblue.blogspot.com/2010/12/tres-awesome-did-gm-pull-off-its-ipo-by.html
You’ve got to be kidding me!
A rhetorical question: why is it that GM acted most like the stereotypical corporate-basher's portrayal of the "wicked corporation" when it was majority owned by the government?
Oldest debt is paid first, the money recovered is from the Bush years. When will we get back the money we "invested" in Europe.
Ding, Ding, Ding....
I have been saying something similar to this for a year.
Every Wonk on Wall St has been sayin' what a deal GM will be it will be debt free, stay away from Ford.
What are they smoking crack?
Look, an amateur Accounting type on this end with a couple of Acctg courses, I could see this! They have so much debt! You can't take money, buy stock and expect to get a "capital" stake in the company even though their a greart deal of tangible assets via plant and intellectual property etc. you can't expect to buy in with a Pension, a VEBA, and 2 Govt's to pay off.
This Violates the Accounting Equation and only despots like Castro and Stalin did it with the power of the gun to let them get away with it.
Even more so it violates Contract Law. Look how many got screwed. Bond Holders, Perferred and then Common Stock Holders all took it on the Chin. A new fangled Structured Bankruptcy and the Pension and UAW come to the front of the line. How is not Contract Law being destroyed with Obamacare? How about all those kids that lose their kids policies, the College kids loosing theirs and now us workers picking new plans or loosing them because we have been mandated a "new contract"? How are we not the Soviet Union or any other Iron Curtain puppet because of the president the dimunation of Contract Law that GM set? Would you hav done business with the USSR and it's states in the 60's and 70's? Where their Contracts honorable?
Am I the only Freeper that see's this?
As witnessed buy the timing, i.e. GM’s IPO, channel stuffing is a fraudulent act intended to raise the value of the company’s stock.
No, I see it. A lot of us see it.
My response, after screaming against this bail out and being ignored along with so many other citizens, was to start my own boycott. I will NEVER buy a GM product, though they now are the only company to manufacture a column shift car. I will take the less comfort, straight-jacket feel front seats, and buy Ford. They are my auto industry heroes, everyone put something on the table in order to make them a viable and profitable company. GO FORD!
ping for later
Ford is absolutely the success story - especially since I bought it at $1.15 a share when it hit bottom.....
GM will be on bankruptcy’s door in about 5 years. Let them sink this time, kick the unions out and they may stand a chance in a legitimate market.
Not investment advice....
I went to visit an old mentor friend of my dad's that taught me about the market. Like you he bought around that level. I asked if he sold yet, and in his late 80's he has seen a lot and said no, it is a $30 stock...Funny thing is he is a dividend investor guy that buys American companies that make things out of steel stuff he can understand, Diesel engine companies, tractors etc. He as done well....
Ok I might be ignorant here on this point, are you referring to automatics shifting on the column or are you referring to a stick shift on the column where you can go through the gears with a clutch by your shelf. Almost all the cars I've owned have been stick shift on the floor, but I learned to shift on a column though many many years ago, The car I learned to drive with had shifting on the column, it was an American motors Ambassador car. My Dad like those cars because they were cheap and easy to work on, basically he liked the straight six engines. But seems like I remember he did have problems at one time with the links to the transmission with these cars, probably that's why they stopped making them.
Losing.
I will be shocked if it is....
I was just being generic, the shift is on the column, it doesn’t matter whether automatic or manual, the lever is on the column and no knee-banging box in the middle of the seats thereby giving more room for actually sitting in comfort :)
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