Automotive News [sub] reports that Vice Chairman of Global Product Development, Bob Lutz, has cashed in his GM chips, selling all his remaining shares in his bankruptcy-bound employer. The ex-Car Czar dumped 81,360 GM shares, slipping $130,989 into his pocket. The sale follows Lutz’s recent filing in Chrysler’s bankruptcy case: an effort to settle an unspecified, but most likely, pay-related claim. Meanwhile, “According to the [SEC] filings, the five other executives who sold all of their GM stock holdings were: Lutz’s successor, Thomas Stephens; GM North America President, Troy Clarke; Chief Information Officer, Ralph Szygenda; manufacturing chief, Gary Cowger; and head of European operations, Carl-Peter Forster.” Apparently, insider trading laws had prevented this mass display of confidence in GM previously. But a “trading window” opened on Monday that allowed the transaction without any legal repercussions. Morally, well, that’s a different story. Bottom line: GM C11 by June 1.
$130,989 in the pocket is better than $0. This is confirmation that many insiders think chapter 11 is about to happen.
Why would that not be insider trading?
I guess I should have read the whole piece sorry.Morally wrong?Maybe it is.I jumped into my life boat and started rowing like crazy 6 months ago.
I tell my buddies all the time”guys get a plan together,its every man for himself” Denial is more than just an African river.If I was in Bob shoes i would of done the same.
Jeez, I’d get less than $3 for my two shares. My parents bought me a share of GM (which later split) for xmas of ’63 or ’64, for $500 inflation adjusted dollars. The $3 isn’t all that’s left. In the good old days, I got what early on was probably on the order of $15-20 inflation adjusted dollars in dividends annually, maybe more.
Croc of Sh!t Bob would not sell for such a pittance unless Ch11 is inevitable where he’d get a fraction of that (remember it’s all about his benjamins – not anyone else’).
RF, I agree with you that GM will file Ch. 11 in 19 days.
More importantly, what idiot bought them??!?!?!?!
I believe a government-sponsored, rotund female vocalist is warming up on the steps of RenCen.
Catch the show on May 31. Tickets are $270 per person, but don’t worry, we’ll add it to your tax bill whether you come to the show or not:)
David Holzman, did you get an actual printed certificate? I bet you did, hold onto it, it may have some future value… as a collectors item one day. You didn’t think I meant value as a share of stock, did you?
What exactly change on Monday that no longer made this insider trading?
Wouldn’t it have been better for him to just keep the stock and take the loss for his taxes. I’m no tax expert, far from it, but isn’t that a deduction. He has already lost millions from the losses on it’s value so far whats a 100 grand to Lutz. That’s a lot to me but come on he is a czar.
I wonder if this news will help crash GM’s price today to under a dollar.
The question is, “What was the cost basis?” These guys took a loss, and will get to declare it as such on their taxes.
Don’t forget, GM plans on issuing 60 billion additional shares of GM stock. Bob’s shares were about to lose 99% of their value. Again.
red:
like Rod says, What was the cost basis?
He’d get to take any deduction on any loss: for example: 1 million – 130,989 (today)
or, 1 million (more / less) in bankruptcy.
Also, it’s only a deduction, worth ~ 35% in real dollars (for someone like bob).
35% of 869001 + 130989 cash is a better deal than 35% of a million…
I could care less about Bob, but what he did just cost me many thousands.
It’s not that anyone would be so foolish as to get into GM, it’s that we are in it and losing money every day…and not everyone can just write this loss off.
Sucks to be me.
Holy shit! Look how GM’s stock is tanking today! They will not last until May 29th, at this pace they will file C11 next week!
GM’s market cap is about $700M (stock price about $1.15) right now. The Chicago Cubs were recently purchased for $900M. The most valuable sports team in the world is Manchester United, worth about $1.8B. So they are worth just about 3 times what the world’s second largest auto maker is worth.
If we wait just a little longer, we can buy up enough stock for pennies, then right GM’s sinking ship ourselves!
Sold stock to who? For every seller there has to be a buyer. Who has $130k to throw away?
This news has done wonders for my June GM puts.
Sold stock to who? For every seller there has to be a buyer. Who has $130k to throw away?
There’s always a knife catcher. GM stock is still as liquid as any other stock traded on the NYSE. If there are more sellers than buyers the Market Makers have to buy to provide liquidity as the price plummets.
Everyone knows GM is going to file CH11. So how is it insider trading when it is common knowledge? He took what he could get and can take his losses in 2009. If he holds his stock until GM files C11, he could be disallowed his losses until the bankruptcy procedures are completed, which could take years.
http://www.FactoryRat.com
I wonder if State Street Bank and Trust is buying the “leftovers”?
Isn’t there some rule that if one holds the stock longer than a given period, selling it isn’t insider trading? That may be the timeline in question here.
Otherwise I don’t know why any of them would have held as long as they did.
“Why would that not be insider trading?”
It is only insider trading if: 1) he knows something the rest of us don’t know, or 2) he purchased stock for less at some time during the last 6 months.
The second seems unlikely. Would a Floridian buy a snow blower in April?
As for the first, every sentient being in the known physical universe knows explicitly that GM is totally and completely bankrupt and that it will file C11 at the end of this month. There is no secret sell side knowledge.
Pete Moran has the better question.
And yet, it’s supposed to be some sort of boon to the UAW to take this “equity” in lieu of cash to pay for VEBA.
PeteMoran :
May 12th, 2009 at 8:42 am
More importantly, what idiot bought them??!?!?!?!
Someone covering a short position perhaps?
@ per
Someone covering a short position perhaps?
Ah yes, maybe I should have said, what idiot criminal gambler bought those GM shares.
(If they’re covering a short, wouldn’t they just a bit longer?)