Its hard to say if the stock is at the bottom. I've been tempted to load up but hold off.
Just some thoughts as I know this is a GM message board: IMO Obama has allowed Chrysler to go Bankrupt to see what the effects are since its a smaller company.If its a total disaster then we won't see GM file. I don't see the Chrysler coming out of this mess and tax payers in general think this is enough. If Chrysler couldn't make a go with a company like Mercedes/Daimler who IMO build very good vehicles then why is it that FIAT (an I'm Italian)is going to save them.Marchionne is creating a disaster for himself as he is is having resistance all over. He doesn't even have a clean deal with Chrysler and he already wants Opel. he's like Christopher Columbus wanting to conquer the world again. There's no excitement in this Fiat /Chrysler merger and this could possibly could work out good in our favor if a GM bankruptcy is totally averted.
If Magna would have bought Chrysler instead of Cerberus then we wouldn't have seen this problem as Ford is going to use there electric car.
What we need is a FORD GM Magna deal to save the North American Car companies .
There will be 1000's of rumors over the next 2 months and remember a shareholders were at the bottom of deck.
If so, I hope you sell tomorrow, assuming it opens over 2 cents/share.
Seriously.
No really, I'm not kidding.
In a filing with the SEC late this afternoon it was disclosed that the GM "restructuring" would:
* Increase the number of authorized shares to 62 billion (!) * Reduce the par value to one cent. * Effect a 100:1 reverse split for the existing shareholders.
The effect of this as disclosed would be that the existing common shareholders would have their holdings reduced in value to one percent of their current market value.
So as of 4:00 Eastern today, your $1.85 stock price would be.... drum roll please..... $0.0185 per share.
There is a lot of other material in this filing related to the restructuring of the debt. The exchange offers appear to have gone from 2/3rds reduction in the outstanding debt to a ninety percent reduction, effectively paying debtholders no more than a dime on the dollar.
Oh, and it gets better. If the "negotiation" is as was done with Chrysler, saying "no" won't do you a damn bit of good - the government will, I would assume, threaten you and then file an involuntary Chapter 11 and attempt to cram this down your throat (or up a much less-desirable place.)
The UAW does not get hit for 90%. The VEBA will get 50% in cash and the other half in stock - newly issued stock - which, of course, is part of the 99% you won't own when this "restructuring" is completed if you are a common stock holder as of tonight. Their effective hit? Zero, assuming the share price does not collapse (again) when this is all said and done.
Oh, and if all this is not completed by agreement before June 1st? The filing makes clear: They're going to see the judge.
For those of you who were trapped in this position since GM was in the $30s and foolishly thought your stock had value, you were wrong.
You're done; God (in the form of The Administration) has spoken and for you, the game is over.
Expect the price of the stock to collapse in the morning.
You did sell today, didn't you?
PS: You think there's a thing called "senior debt" in this country any more? Uh, no. There is not. The Capital Structure no longer has ANY legal meaning. Guess what this does to the banks in particular (anyone with government "rescues") along with the potential for ANY firm in the US? Yep.
Disclosure: No GM position other than "I told you so!"
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