generalmotors posts
Posted Jul 7th 2009 2:20PM by Zac Bissonnette
Filed under: General Motors (GM)
Last week I wrote about the plans for a
General Motors IPO in 2010, which led to some confusion: General Motors has been publicly traded for nearly a century, so what's all this about an IPO?
One commenter asked "Does anyone know if you own GM stock now, and they have a new IPO what happens to your existing shares of the stock?"
The answer is a sad one, but here it is: The shares of the old GM will be "canceled" as part of the bankruptcy and only the shares of the new GM that can be purchased during and after the IPO will have any value. Shares of General Motors are still trading on the over the counter market for around 65 cents per share -- perhaps as a result of the confusion surrounding the bankruptcy. But it's extremely unlikely that those shareholders will get anything as part of the bankruptcy.
The reason is that shareholders always come last after creditors in a bankruptcy situation, and there isn't enough value in GM to make all the parties that are owed money whole. Because of that, there is nothing for shareholders.
Posted Jun 19th 2009 3:20PM by Steven Mallas
Filed under: Earnings reports, Ford Motor (F), General Motors (GM), AutoNation Inc (AN)
CarMax (NYSE:
KMX), an expert in used automobiles and a colleague of
AutoNation (NYSE:
AN), is up today nearly 14% in early-afternoon trading on spectacular volume. What's driving (pun intended!) the buying action? You guessed it...earnings. Revenues for the first quarter decreased 17%. Adjusting for items, CarMax earned $0.22 per share, and, according to my colleague
Melly Alazraki, that figure simply annihilated earnings projections developed by the analysts.
Well, well, well...what to do now, right? CarMax is an interesting company in an interesting time. It sells used cars during a period when new cars aren't selling too well. We all know about the problems at Ford (NYSE: F) and General Motors (OTC: GMGMQ). But that isn't reason enough to put money down on this stock. Especially not after a rally like we're seeing today.
Continue reading My portfolio won't be test-driving CarMax
Posted Jun 16th 2009 12:00PM by Zac Bissonnette
Filed under: Law, General Motors (GM)
The General Motors bankruptcy has been tough on most of the company's constituents, but not on its lawyers.
The Wall Street Journal reports (subscription required) that "Weil, Gotshal & Manges LLP earned $54 million in fees and expenses in the six months leading up to the auto maker's June 1 bankruptcy filing, according to a recent court filing by Weil Gotshal. Much of the $54 million didn't relate strictly to GM's Chapter 11, according to a Weil lawyer. The firm's lawyers are billing GM at a rate of $355 to $950 per hour."
The firm is trying to become lead debtor's counsel for the GM bankruptcy but hasn't yet received court approval. GM's other top two law firms earned a combined $26 million in fees.
Continue reading One law firm gets a $54 million cut of General Motors bankruptcy
Posted Jun 11th 2009 3:30PM by Zac Bissonnette
Filed under: General Motors (GM)
The average American family of four has, against its will, invested over $900 in the Detroit auto industry so it's fair to ask: Will we be getting our money back?
President Obama's auto task force told lawmakers yesterday that there is a "reasonable probability" that the federal government will be paid back. I don't buy that and here's why:
Liquidation analysis of GM suggests that there would be just $10 billion in net proceeds from a liquidation. Given that the government has $80 billion invested in the industry with little collateral, long-time money losers like GM and Chrysler will need to earn spectacular returns on equity to pay back their loans. I just don't see it happening. Do you?
Continue reading Obama says 'reasonable probability' of getting paid back on auto loans
Posted Jun 11th 2009 10:45AM by Elizabeth Harrow
Filed under: Bad news, General Motors (GM)
Downtrodden General Motors (OTC: GMGMQ) is throwing in the towel on its 2010 hybrid-electric Chevy Malibu, according to a report in The Wall Street Journal (subscription required). Due to weak demand among retail customers, dealers have stopped ordering the car, and the automaker is currently choking on a backlog of the unpopular hybrids.
To drive home the point, the Journal quotes Joe Menegos, the sales manager at a National City, Calif., dealership, as saying, "We could care less" that the hybrid Malibu is being deep-sixed.
Continue reading General Motors yanks the hybrid Malibu, warns common shareholders
Posted Jun 8th 2009 9:30AM by Zac Bissonnette
Filed under: General Motors (GM)
AlixPartners, one of the firms charged with helping General Motors navigate its way through bankruptcy, performed liquidation analysis as part of the company's court proceedings, and its findings are disturbing: If GM liquidated tomorrow, there would be less than $10 billion in net proceeds.
The New York Times reports that "bank lenders owed $5.4 billion would recover from 26.3 to 77.1 cents on the dollar. The United States Treasury, on the hook for $20.5 billion, fares even worse under this scenario, getting just 12.7 cents to 23.7 cents on the dollar for its claims. Unsecured creditors would get nothing." (emphasis added)
Continue reading If GM liquidates, everyone loses
Posted Jun 4th 2009 9:00AM by Zac Bissonnette
Filed under: General Motors (GM)
General Motors only filed for bankruptcy on Monday, but already the skeptics who said a government controlled automaker was a recipe for disaster are being proven correct.
The Wall Street Journal reports (subscription required) that "Top executives of General Motors Corp. and Chrysler LLC defended plans to cut thousands of car dealerships at a congressional hearing where senators questioned whether the dealers were being unfairly treated in the companies' downsizings."
In its role as the soon to be largest shareholder of General Motors, the United States government has a responsibility to monitor the company and its policies as they pertain to the interests of shareholders -- executive compensation, capital structure, board make-up, corporate governance, etc. But when was the last time you saw an activist investor complain about the way underperforming dealers at a company were being treated? I'll give you a hint: It's never happened.
Continue reading Worst fears of US-controlled GM are coming true
Posted Jun 2nd 2009 5:00PM by Michael Fowlkes
Filed under: Good news, Products and services, Management, Industry, Consumer experience, Competitive strategy, Ford Motor (F), General Motors (GM), Marketing and advertising, Market matters, Recession, Financial Crisis
If you compare last month to May 2008, then
Ford Motor Company (NYSE:
F) looks pretty shaky: the American auto maker posted a 24% dip in sales year over year. However, the picture starts to look a lot better once you compare April and May of this year.
All in all, Ford sold 161,197 vehicles last month in the U.S.. Yes, this was 24% off the pace it set last year at this time, but it does mark a pretty impressive 20% jump over its numbers during the previous month, as the company was able to take slight advantage of its competitors' financial woes.
Continue reading Ford sees big drop in May sales, but does pick up market share
Posted Jun 1st 2009 6:00PM by Beth Gaston Moon
Filed under: Rumors, Cisco Systems (CSCO), General Motors (GM), Indices, Citigroup Inc. (C)
After weeks of speculation - Apple! Amazon! Nike! Toyota! -- all became clear today when
General Motors Corporation's (NYSE:
GM) exodus from the Dow Jones Industrial Average (
DJIA) made room for...
Cisco Systems, Inc. (NASDAQ:
CSCO). While perhaps not as sexy a name as, say,
Apple, Inc. (NASDAQ:
AAPL), it does add one more tech name to the venerable 30-stock average.
Wall Street Journal Managing Editor Robert Thomson released a statement noting that CSCO made the cut "because its communications and computer-networking products are vital to an economy and culture still adapting to the Information Age -- just as automobiles were essential to America in the 20th Century." So
there's the connection!
Continue reading Cisco, Travelers join the Dow
Posted Jun 1st 2009 2:25PM by Zac Bissonnette
Filed under: General Motors (GM)
Here's something you don't see very often: A company files for bankruptcy protection and its stock price soars.
Shares of
General Motors (NYSE:
GM) are currently trading up about 6% to just under 80 cents per share -- but moved as high as $1 in earlier trading.
But why? There had been reports that GM stockholders would get a 1% stake in the restructured company, but now it's expected that they'll get a well-deserved zero. In response to a Washington Post reader's question about what happened to shareholders a result of the bankruptcy, auto industry consultant
William Holstein writes that "GM stockholders are expected to be wiped out. You get nothing for your shares. They become collector's items. "
Continue reading Why are shares of General Motors trading up?
Posted May 29th 2009 4:40PM by Zac Bissonnette
Filed under: General Motors (GM)
Shares of General Motors Corporation (NYSE: GM) have fallen more than 30% in trading today on reports that the company's bankruptcy filing will come on June 1st. They're currently trading around 75 cents per share -- their lowest point in more than 75 years.
The interesting thing is that they're trading as high as they are. To the people who purchased the more than 200 million shares that have changed hands today: The market cap of General Motors currently values the company's equity at $470 million when the equity is about to be made worthless with a bankruptcy filing. If this were any company other than GM, investigative reporters would be calling it the most overvalued, over-hyped company on the NYSE.
Continue reading General Motors shares sink below the century mark
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The domestic automakers have all but given up and declared bankruptcy in an effort to survive in some form. Chrysler is about through its process, and GM is well on its way to becoming a completely new company. The standout: 
Now that 
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