GM Bankruptcy Thread

GM wasn't bailed out, the UAW was. They refused to concede anything and are being rewarded. Within six months ot a year, GM will be a GSE, just like FNM and FRE, with a CEO and Board selected by Obama and Nancy Pelosi.
 
Quote from AAAintheBeltway:

GM wasn't bailed out, the UAW was. They refused to concede anything and are being rewarded. Within six months ot a year, GM will be a GSE, just like FNM and FRE, with a CEO and Board selected by Obama and Nancy Pelosi.
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If I were a UAW capo, I'd only make minor concessions that don't mean anything but look really good. Then I'd say "FY GM, go ask Congress for more money, we're not giving up anything else."

GM better include some democrat issues in it's "plan" - like affirmative action stuff, a lot of money going to electric cars and no layoffs in the districts of powerful members of Congress. The federal government essentially owns GM, so the corporation needs to lube up and grab some ankle.

Taking a bailout from the government is a lot like signing a deal with the devil. :(
 
The UAW contract for F weighing in at a staggering 22 pounds!!:

<IMG SRC=http://www.elitetrader.com/vb/attachment.php?s=&postid=2219305>
 
That's an impressive stack of paperwork.
I've seen something almost like that before. Once.

Only once

and by "almost" I mean probably not even half.
 
Quote from TGregg:

The UAW contract for F weighing in at a staggering 22 pounds!!:

<IMG SRC=http://www.elitetrader.com/vb/attachment.php?s=&postid=2219305>
More...

This is what your tax dollars are being used to protect.

Wonder how big toyota's is? Do they even have a union at any of their plants?
 
General Motors Corp. (GM) bondholders are signaling that they are prepared to accept 40c and possibly even as little as 30c on the dollar for for their GM debt, the Detroit News reported Wednesday on its Web site, citing people familiar with the situation. This is less than the 50c on the dollar that they had been pressing for. The concession is contingent, however, upon federal guarantees on the automaker's new debt. Government backing would have to be approved by Congress. The deal under discussion between GM and representatives of its largest institutional bondholders would give bondholders 10c on the dollar in cash and 20c to 30c in new notes. Full story at

http://www.detnews.com/apps/pbcs.dll/article?AID=/20090225/AUTO01/902250373/1148/AUTO01
 
I'm not sure if this is just me, but here goes:

Through a combination of shorting GM, and selling March 2009 options, I've made a fair bit over the last few months. I covered all of my short position below $2.50.

Now as I type the stock is a little above $4. Yes I am aware that:

(1) Obama said he won't let the company fail

(2) Obama will give GM an extension on the March deadline

(3) Bankruptcy is looking increasingly unlikely

(4) GM said it won't need to ask for more money

(5) General rise in equities over the last couple of weeks

However, despite the above, some simple home truths remain:

> Auto sales have fallen off a cliff

> Although bankruptcy may be unlikely, it's hard to see the company making a profit in the next year or two

> Massive potential dilution from bondholders converting debt to equity

So, despite all this, I still think the stock provides an excellent shorting (or selling calls) opportunity above $4, with a target price of .... $2.50 or even lower.

Am I missing something here?
 
Also I notice that GMW is (previous close 4.10) offered at 3.80.

Given the common stock is up 19%, I would assume that GMW would be offered above 4.10.

I'm not confident enough to hit the 3.80 offer, but it's there for anyone to take it.
 
GM Offers Union $10B In Pfd Stock At 9% -CNBC

Market cap of GM at $3.60 share price is

610.50 million * 3.60 = 2.1978 billion

or about $2.20 billion

So obviously $10 billion in preferred is a lot compared to the current market cap of common
 
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