REPORT: Despite having no real value, investors continue to trade GM stock
As of 10 am this morning, General Motors stock was trading at about 80 cents. If you think that is a bit of a bargain, you may be a bit of crazy. With The General apparently almost finished with bankruptcy, there is near certainty that the company's common stock will mean exactly nothing in a manner of days or weeks.
GM is warning investors that the stock grab is a bad idea, releasing a statement reiterating its "strong belief that there will be no value for the common stockholders in the bankruptcy liquidation process, even under the most optimistic of scenarios."
With GM common stock scheduled for oblivion in the near future, it seems likely that any money spent on stock in the struggling company would be more useful as kindling for a bonfire. Since the new GM will be owned by the federal government, unions and shareholders, the stock-buying public likely won't have an opportunity to buy in for months – or more likely, years.
[Source: Detroit News | Image: Scripophily Trader]
Get a WordPress.com Blog
Reader Comments (Page 1 of 2)
pmalik 2:08PM (7/02/2009)
This is what happens when people can't short the stock - the value will always be above the fundamentals.
Reply
xtasi 2:12PM (7/02/2009)
do the stock of the executives that drove the company to the groups also become worthless? if so, then sweet, sweet irony. Others that invested the retirements, ouch!
Reply
Alex 3:08PM (7/02/2009)
Yes, their common stock is worthless too. However, most, if not all of them, have already unloaded their stocks.
Richard S. 2:25PM (7/02/2009)
Some of the volume is probably from people buying stock then having the Transfer Agent, issue the certificates and mail to them so they can keep them as souvenirs.
Reply
Randy 2:02AM (7/03/2009)
For what? To frame and say "hey kids, when i was your age I bought worthless sh*t"? lol
MRX19 2:30PM (7/02/2009)
Have had GM stock in my family for many decades. Remember my mother telling me, long ago, to never sell as it was good as gold. Probably turning over in her grave now.
Reply
Redline 3:09PM (7/02/2009)
Don't understand why you would just buy and hold.
HotRodzNKustoms 2:32PM (7/02/2009)
I was actually thinking of buying a single share of stock to have the stock certificate. I mean the piece of paper is worth more than the stock so maybe in time when the environmentalist declare the environment the greatest single threat to the environment, the paper might actually go up in value after they burn all the trees down.
Reply
tuxchown 2:39PM (7/02/2009)
The federal government and the union want out of ownership as soon as possible but one thing is apparent: General Motors is not going away. In fact, the "new GM" will end up being stronger than has been in decades. People know this. But they mistakenly believe that buying into the stock now will pay fortunes in the future. They will be proven wrong.
Reply
Willem B 2:45PM (7/02/2009)
you're probably right.
they probably think they are buying stocks in the "new GM"
Jay Evans 2:50PM (7/02/2009)
Well if you bought GM stock at $0.61 a month ago and can sell it today at $0.91 that's a 50% profit. Not bad for 30 days.
Reply
paul34 4:01PM (7/02/2009)
Who's going to buy it? You need someone to buy what you're selling.
Thomas 2:55PM (7/02/2009)
This is two things: 1) short covering; people who shorted the stock still have to give back the stock they borrowed. 2) morons; people with an e-trade account who should put their money in a passbook savings account.
Reply
Redline 3:10PM (7/02/2009)
And then the professional and more knowledgeable traders exploiting those morons.
paul34 4:02PM (7/02/2009)
Yup, the market makers always love manipulating the bid and ask so that you never win, but they always do... especially on newbie-magnet stocks like this.
HJC 2 5:10PM (7/02/2009)
Thomas
You forgot the third one : Same people who voted for Obama :=)
wendell 3:37PM (7/02/2009)
Auto Guy wallpaper
Reply
tgriffith 3:41PM (7/02/2009)
I'm thinking it's time for a GM name change. After stories like this, what value is left in the General Motors name?
http://www.cargurus.com/blog/2009/06/16/its-time-for-gm-to-change-its-name/
Reply
tuxchown 3:58PM (7/02/2009)
General Motors is still the number one selling car company in the United States. I am sure that accounts for some value.
A.N.E. 3:43PM (7/02/2009)
Isn't this called DENIAL?
Reply