So says the bond market according to Bloomberg. And yes, we’re definitely talking about the “New GM.” Using a Deutsche Bank formula for analyzing the bond market, demand for GM debt shows the company to be worth about $33 billion post-bankruptcy. By comparison, the same formula estimates Ford’s value to be about $19.9 billion. Still, that valuation shows just how little the taxpayer intervention in GM bought for its $65 billion investment. The Deutsche Bank report, by analyst Rod Lache, indicates that GM’s post-bankruptcy value will be on-par with its 2002 value. But, “Much higher — and consistent — levels of profitability” will be needed to keep that market value, according to Credit Sights Inc analyst Glenn Reynolds (no relation to the famed blogger). “It takes more than government debt-to-equity swaps.” There’s always a catch, isn’t there?
There’s no way it’s worth more. They ripped off the shareholders and bondholders, so they are not trustworthy.
I wouldn’t buy any investment (or other) GM vehicle, be they new, old, blue, or borrowed.
No way. As an investor, I shall stay away. And as a holder of investemnts such as mutual funds and 401k/IRA funds, I shall require that they also stay away, or I will sell my shares.
I must do this, or I’m not looking out for myself.
I’m also willing to bet that their “net worth” will begin to steadily decline month after month as they pay suppliers, meet payroll, service their (still considerable) debt load, etc. Business basics dictate that net worth = gross profit – expenses. As long as your expenses are higher than your GP you are going in the wrong direction.
TexN –
I’m not an accountant but I believe net worth is assets-liabilities
No way I’d invest in GM over Ford on principal alone until they pay back the money they took from the public coffers.
#1 I bought over 2000 shares of Ford when it was just 1.20 so right now, IM VERY VERY HAPPY.
#2 I’m waiting for this shit to clear up with GM to buy in for pennies because I know that the restructuring is gonna really help GM kick ass in the future – or, at least long enough for me to profit from it.
#3 I’ve given financial advice on TTAC before…. If I were you guys I’d be buying into pharmeceutical companies. I’ve got over 3000 shares in drug companies trading for cents now who – just 3 years ago were over $1000 a share.
Um, it’s actually the cash that our elected officials gave them despite a low public desire for said outcome. Quit acting like the companies came in and forcibly took the cash from King Obama, all his horses, and all his men.
Ford just refinanced an ass load of debt. If their stock price stays strong then they will be able to do it again, if credit markets pick up and their bond ratings improve they will refinance or unload even more of it. Their resources are not that limited yet.
People need to stop acting like Gubment Motors and Fiatsler = automatic Ford fail. To say so is short sighted. Elsewise it needs to be assumed that ALL automakers will eventually fall to the might of GM and Chryco. However, if they go back to making crap cars and their sales plummet government assistance won’t mean anything.
It’s been proven in the past that price advantage does not = automatic success in the car market.
I’m not an accountant but I believe net worth is assets-liabilities
The term you’re looking for is “owner equity.”
When someone says a company is “worth” a certain amount, they usually are referring to its market capitalization or an estimate of what it would be (eg, in the case of privately-held firms).
The worth of a thing is what will it bring. With GM it’s not muchy
@ Flashpoint
“#3 I’ve given financial advice on TTAC before…. If I were you guys I’d be buying into pharmeceutical companies. I’ve got over 3000 shares in drug companies trading for cents now who – just 3 years ago were over $1000 a share.”
Well which ones are they? Names please names.
The worth of a thing is what will it bring. With GM it’s not muchy
I’m imagining that Master Po dude what called Kwai Chang Caine “Grasshopper” saying this. It’s working for me.
(RIP DC. You da Man.)
JCKIRLAN
I specifically avoided giving names because of my employment…
http://www.bullsector.com/pharmaceutical.html
Flashpoint :
I specifically avoided giving names because of my employment…
And for good reason, too. I would never buy stocks that are still going down; as are most of those in your link…
ZoomZoom
So in your opinion its stupid to buy into stocks that are low but have had extremely high apexes – which are currently rolling out new drugs?
I bought into Palm, Walmart, Ford and a bunch of other stock that were on decline …
with 1000 shares each mentality.
Now I’m sitting on top of a couple million dollars.
How do you say that my picks are bad?
BUY LOW AND SELL HIGH.