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In the name of faith: GM dealers buy $1M in GM stock
GM has had what can be conservatively called a difficult week. In a live press conference, CEO Rick Wagoner delivered sobering news about health care cuts, asset sales, retirement and separation packages, and the elimination of GM stock dividend. The doom and gloom hasn't scared off the General's Dealer Council, as 20 retailers purchased a combined $1m in GM stock to show their support. Of course $1m isn't going to help much in the face of $15 billion in cuts, but co-chair Duane Paddock wanted to make the gesture to show GM and its massive dealer body that the council believes in the struggling automaker.
The move could be considered risky in light of the fact GM stock has dropped like a rock over the past couple months, and when the stock dropped to below $9 per share, it was a 50-year low point. So far the council looks both loyal and fiscally prudent. After Wagoner's press conference, GM stock rose by 16.6%. That translates into about $170k in earnings in just under a week. The way vehicle sales have been at GM dealerships, the dealers may want to try their hand in the market more often.
[Source: Automotive News (subs req'd)]
Reader Comments (Page 1 of 2)
tankd0g 2:56PM (7/17/2008)
Hell, at that price I'm thinking about buying some. I mean it has to rebound at some point. Like when the Chinese buy controlling interest.
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MJK 3:00PM (7/17/2008)
oooohhhh the things you say!
Ligor 3:03PM (7/17/2008)
wish I had some liquid cash,
i'd have opted for about $50k worth of GM stock at $9.50. It's already over $12 right now, and I predict will be at $28 by end of September
but even if you sold at $12, it's already 25%+ over what you put in, in a matter of a few days.
rich people are making some qick cash in this economy.
I guess the rest of us are just glad we have what we have and will make do with it.
tankd0g 3:08PM (7/17/2008)
Day trading can be easy money, but you need money to make money :)
Frank 3:22PM (7/17/2008)
you dont need that much money to make money day trading, buy an iphone and u can check ur account whenever. 2000 for a margin account on zecco, plus the 10 free trades. ud be wise to buy the bank stock after a massive selloff then sell the next day when they are up 30%.
Scott 3:24PM (7/17/2008)
So...each of the ~7400 GM dealerships kicked in a whole ~$135.00. Now, that's a vote of confidence. :)
why not the LS2LS7? 4:48PM (7/17/2008)
Scott:
summary says 20 dealers split the $1M.
Obviously DaMinority 9:26AM (7/18/2008)
I bought at 10 Tankd0g, if more people evaluated the facts instead of knee-jerk hater comments. My profits would already be above 25%. Of course, if more people evaluated the facts (24B in cash with a 1B burn rate at current conditions, 15B in savings just announced, 1.2B monthly concessions kicking in 22 months from now...) the stock would properly be valued at the #1 seller in the US and the #2 worldwide...
But no, most people don't do that.
TriShield 3:07PM (7/17/2008)
The stock will drop again when GM reports their July sales figures.
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Jared 3:09PM (7/17/2008)
Never try to catch a falling knife.
Disgruntled Goat 4:17PM (7/17/2008)
GM has a market cap of $6 billion with revenue and assets around $200 billion each. Like GM or not, at the current price it's a steal. In 5 years if GM is trading at less than 500% of where it is today I'd be flabbergasted.
Kingus 4:52PM (7/17/2008)
I never understood that either, they have billions in assets, how can their market cap be so low? Couldn't some billionaire buy it for 6bn then sell off all the assets? Or are they that far in debt?
Torrent 3:19PM (7/17/2008)
lol
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Randy 3:23PM (7/17/2008)
"stock dropped like a rock"
ROFL. Now that's funny! The situation is not, just the words used by the writer! LOL
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montoym 7:57PM (7/17/2008)
Cue Bob Seger :-)
DJ 3:23PM (7/17/2008)
This sounds great, but only 20 dealers bought in, that’s hardly a show of support given the thousands of dealers in the US alone.
Have a listen to the July 13 podcast of CBC’s The Sunday Edition for a decent discussion of what’s wrong with the auto industry, globally. It is in the context of GM’s most recent problems, but they are also not shy about criticizing Toyota, who’s just as much to blame for what’s wrong with the industry.
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iQuack 3:25PM (7/17/2008)
I've had GM stock for 28 years and it's been lousy compared with many other stocks. Should have sold it, but my position is small so I ignore it. It had been paying a nice dividend, so one reason to hold on.
Buy GM for the short, not long term. Might be cheap now, but could be a dead loss if GM enters Chapter 11 which is possible--just like it's one-time division, Delphi.
The trouble with a stock like GM is that it must be constantly watched and you have to be ready to pull the plug on short notice. If you're a long-term, buy and hold investor, GM is a poor choice for you IMO.
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Chris 3:37PM (7/17/2008)
Sounds like a good deal.
In case anyone is interested, I'm selling a bridge. Cheap. It's located in Brooklyn NY, and it's in great shape.
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alex hofstetter 3:37PM (7/17/2008)
morons
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roar 4:07PM (7/17/2008)
They made $300,000 so far, how much do you make? Do you make $20,000 a year? Who is the moron? Success is just luck, ask a failure.