There’s really only question remaining: can GM make it to the end of the month? As the artist formerly known as “the world’s largest automaker” augurs-in for its official face plant, the market is readying for a total wipe out, sending The General’s share price to a buck a pop. Which is, as we all know, about a dollar too much. “Experts have said that GM’s stock is overpriced,” USA Today reports, “considering that the automaker’s debt-restructuring plan will leave current shareholders with just a 1% stake in the reconstituted company.”
All the signs point to a weekend filing at the end of the month (the 31st falls on a Sunday). If the fact that GM’s ex-Car Czar and five of his cronies cashed in their chips wasn’t enough to convince anyone delusional enough to hold out hope for GM’s new new new new new new new turnaround, the Detroit Free Press reports that the ailing American automaker will pay its suppliers early, on the 28th. That way, the payments won’t get stuck in C11 court proceedings. Needless to say, GM’s spinmeisters are lying right to the end. “[GM spokesman Dan] Flores said the move does not mean GM will file for bankruptcy protection.” Yes, it does.
I cannot for the life of me imagine who the buyers are at $1/share. Low information speculators?
John Horner,
They all have the last name DeLorenzo.
How about suggesting that GM run a Carpocalypse offer–buy $10,000 of stock and get a free Aveo! But Wait! There’s More! Buy only an additional $1,000 of stock and we’ll throw in a free Pontiac G3!
I’d have to assume at this point that a 1$ lottery ticket is a much better investment than 1$ GM stock.
Samuel L. Bronkowitz:
“I’d have to assume at this point that a 1$ lottery ticket is a much better investment than 1$ GM stock.”
Kudos, best line of the day. Although I still can’t figure out how the price rebounded yesterday and actually GAINED some. Please somebody explain this one…
RF, they will make it last 2 more weeks. These idiots have a fixation for the end-of-the-month thing. Remember, they’re all accountants…
I cannot for the life of me imagine who the buyers are at $1/share.
The potentially smart ones: Short coverers, day traders, and market makers.
The dumb ones: Investors who mistakenly believe that $1 GM stock is some sort of bargain, when it’s actually scary.
John Horner: “I cannot for the life of me imagine who the buyers are at $1/share. Low information speculators?”
There may well be some speculators (such as day traders) who are buying, but my guess is the buying is done by the stock exchange members called “specialists” who have the responsibility of maintaining a market; i.e., being a buyer when no one else will buy. And possibly, some index funds buy shares just so they can fulfill their mission of having a proportionate percentage of all companies listed. Robotic trading is what I’d call it.
Another thing is that not many people are selling GM stocks any more. Those who would sell, already did so. At this level, you probably will not be able to burrow shares from your brokerage to short-sell GM, even if that would make sense and bring GM shares to its true value—0.
According to news reports I’ve seen this is the lowest price/share since, I think it was 1931.
But to put “value” into perspective consider the price in terms of purchasing power of the dollar or “constant” dollar.
According to the calculator found on the http://www.measuringworth.com site:
$1 in ’31 could buy what $14.14 buys in 2008 (the latest year for which data is available).
Or put another way, the current $1 bill is worth seven cents in 1931 money.
So I guess GM stock is worth about 7 cents a share…
Samuel L. Bronkowitz:
“I’d have to assume at this point that a 1$ lottery ticket is a much better investment than 1$ GM stock.”
I get your joke sir…unfortunately the reality is GM’s stock still has a better chance of giving you something back for your $1 than the lottery.
I think my favorite stat on the lottery is that (depending who does the calculation) you have a x10-100 better chance of dying just on the way to buying the ticket than you do to win.
Question, which depreciates faster, the Chevy Aveo or the $1 share?
Another question, if a Chevy Aveo crashes in the forest, do the trees laugh?
I get your joke sir…unfortunately the reality is GM’s stock still has a better chance of giving you something back for your $1 than the lottery.
Not necessarily. You don’t have to win the jackpot of the lottery to make money. Most lotteries also pay out for matching on three, four, five, etc numbers. With the Powerball, you have a 1 in 62 chance of tripling your $1 investment by just matching the Powerball number. Overall, the probability of winning any prize is 1 in 35.