GM Bankruptcy Thread

The Gov't IS talking about bankruptcy for GM. The stock will be worthless.


Quote from cashmoney69:

The Govt said its NOT going to let GM fail...does that mean its a RISK fee trade buying GM here at 3?


At least thats the message im getting from the news.
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Who is buying GM?
thread can be found here
http://www.elitetrader.com/vb/showthread.php?s=&threadid=159194

Two WSJ articles confirming the likelihood of a mid to late May bankruptcy filing:

U.S. Threatens Bankruptcy for GM, Chrysler
http://online.wsj.com/article/SB123845591244871499.html

Bankruptcy Leads Possible Plans for GM, Chrysler
http://online.wsj.com/article/SB123841609048669495.html

This makes sense - 60 days from 30 March = 29 May.

I'm still amazed the stock didn't go below $2.40 today, and that it closed as high as $2.70.

Market cap @ $2.70 = 1.65 billion according to Yahoo Finance.
 
Quote from Cutten:

Study harder, grasshopper.
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Obviously you don't have a clue as to what Obama and friends plan to do -- nor do you understand the auto industry. Trust me, from someone who spent 10 years in Detroit I can tell you that buying GM at these levels will make you some $$$. Bondholders, UAW and GM mgt. will have to make concessions.
 
Just to be sure, are you saying that buying GM common stock at $2.70 is a money-making idea?

My view is that if bondholders / UAW make concessions, they are handed a huge amount of GM stock.

As an example, have a look at these two stories:

http://news.yahoo.com/s/nm/20090327/bs_nm/us_gm_uaw

http://www.cnbc.com/id/29915225/site/14081545

Acceptance of these offers would result in massive dilution, given that the company has a current market cap of $1.65 billion


Quote from DHOHHI:

Obviously you don't have a clue as to what Obama and friends plan to do -- nor do you understand the auto industry. Trust me, from someone who spent 10 years in Detroit I can tell you that buying GM at these levels will make you some $$$. Bondholders, UAW and GM mgt. will have to make concessions.
More...
 
Source: GM Bondholders To Meet Monday - Reuters

Last update: 3/30/2009 8:06:25

PMDOW JONES NEWSWIRES

A committee representing General Motors Corp.'s (GM) bondholders will meet later Monday to discuss a debt restructuring plan, Reuters reported, citing an unnamed source familiar with the situation.

GM has offered bondholders 8 cents on the dollar in cash, 16 cents on the dollar in new, unsecured debt, and a 90% stake in the automaker, the news agency reported on its Web site, citing the source.

That would translate into $2.2 billion in cash, $4.3 billion in debt and an additional stock-based payout in a recapitalized company that largely would wipe out current stockholders, Reuters said.

Full story:

http://uk.reuters.com/article/motoringAutoNews/idUK203029+30-Mar-2009+RTRS20090330

(END) Dow Jones NewswiresMarch 30, 2009 20:06 ET (00:06 GMT)
 
Quote from DHOHHI:
Trust me. . .buying GM at these levels will make you some $$$. Bondholders, UAW and GM mgt. will have to make concessions.
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Quote from Reuters:
GM has offered bondholders 8 cents on the dollar in cash, 16 cents on the dollar in new, unsecured debt, and a 90% stake in the automaker, the news agency reported on its Web site, citing the source.

That would translate into $2.2 billion in cash, $4.3 billion in debt and an additional stock-based payout in a recapitalized company that largely would wipe out current stockholders, Reuters said.

Full story:

http://uk.reuters.com/article/motoringAutoNews/idUK203029+30-Mar-2009+RTRS20090330
More...
 
The fate of GM and Chrysler has put the Obama administration between a rock and hard place, especially in the “context of the decisions it must make in the self-imposed deadlines of 30 days (Chrysler) 60 days (GM) it may proclaim.” The White House will “lose credibility” if Chrysler and Fiat fail to merge or if GM needs more than 60 days to restructure.

Source
 
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