GM 1 Strike Puts
- Thread starter TM1982
- Start date
You're forgetting that the "1%" isn't news - hasn't been news for a long time - so has already been priced in.
For the gov't stake to come out flat, the post-reorg market cap needs to be ~70B. Whether or not that happens is of course open to conjecture. One percent of that is $700M. There are approximately 600M shares outstanding, putting the value right around $1/share.
Assuming something like the proposed deal goes down (adjusting the union percentage down and the bondholder percentage up) we're going to be looking at a huge enterprise with a very small tradable float to begin with. Will be interesting to watch the fireworks on that...
Ain't that the truth! Said a long time ago GM was going to be the most entertaining trade story of '09, so far it hasn't disappointed.
Quote from Random.Capital:
You're forgetting that the "1%" isn't news - hasn't been news for a long time - so has already been priced in.
For the gov't stake to come out flat, the post-reorg market cap needs to be ~70B. Whether or not that happens is of course open to conjecture. One percent of that is $700M. There are approximately 600M shares outstanding, putting the value right around $1/share.
Assuming something like the proposed deal goes down (adjusting the union percentage down and the bondholder percentage up) we're going to be looking at a huge enterprise with a very small tradable float to begin with. Will be interesting to watch the fireworks on that...
Ain't that the truth! Said a long time ago GM was going to be the most entertaining trade story of '09, so far it hasn't disappointed.
I'm going to sell some Dec 1 Calls today. Probably early in the morning.
I think you all are crazy to mess with GM. You cant use any reason or logic with it. If you buy puts, its very likely that GM will declare BK and you make money. But you cant use logic like that. You got the "obama" factor. He could just come in and do something crazy like pay off the bondholders and forgive the debt.
Seriously, don't put any real money into GM. Only put the same amount you are willing to blow in vegas as its all chance with GM right now. You cant use fundamentals with the crazy obama bailout factor.
Seriously, don't put any real money into GM. Only put the same amount you are willing to blow in vegas as its all chance with GM right now. You cant use fundamentals with the crazy obama bailout factor.