Paging Captain Obvious: Liquidation Motors reportedly tanks in trading
The short version: old General Motors is worthless, new General Motors is... well, less worthless. The Securities and Exchange Commission has already warned us that Motors Liquidation Company, the new name for the leftover scraps of GM, is not expected to return any value to stockholders. Despite this, the stock still has a fractional dollar value assigned to it, and some investors are still trading it. Yesterday, shares dipped 52%, closing at 55 cents.
The newly created "good" GM emerged from bankruptcy less than a week ago, and what's left at Motors Liquidation, still publicly traded, is highly unlikely to return any value, as Motors Liquidation will still be underwater after Chapter 11 fire sales are over. Bloomberg reports that this shell of the former company has 16 shuttered plants to sell off, as well as a nine hole golf course in New Jersey (we're as confused as you are), and of course, it is still beholden to unsecured creditors and also still holds the bag for lawsuit liabilities, too. Warnings are being clearly stated and more and more investors appear to be cottoning on to the reality that MLC stock doesn't hold much water, which explains the stock's precipitous decline.
[Source: Bloomberg via STLtoday]
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Reader Comments (Page 1 of 1)
MemphisNET 10:22AM (7/16/2009)
I don't think I've ever heard another person use ''Captain Obvious'' !!
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Rich 10:22AM (7/16/2009)
Just in case you didn't realise, "less worthless" means exactly the opposite of what you seemed to intend.
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Shamdiddly 11:07AM (7/16/2009)
(-1)*(1)*(-1) = 1
Neil Schelly 10:33AM (7/16/2009)
It's a penny stock with a lot more motion and media attention than most. It can be bought in bulk for very little investment, and sold shortly afterward for a decent profit, even if it's only gone up a few cents. If someone can time things right, they can still make a decent bit of money with a stock like that and it should come as no surprise that people will try.
-N
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Chase 10:54AM (7/16/2009)
That's the same as going to vegas. Speculation is not investment.
Nightcrawler 11:36AM (7/16/2009)
But why would it go up a few cents? Why would it have any value at all? you'll get zero return on your investment, so why didn't the value drop all the way to zero?
I could see a value of a few cents because some people might buy a few shares as a novelty, but I'm at a loss to figure out why it would be worth as much as 55 cents.
Jay Evans 11:59AM (7/16/2009)
Buy low, sell if it goes up. Trick is not being the last guy out of the pool.
tankd0g 12:23PM (7/16/2009)
Penny stocks like these gain value simply because people are buying them. Once it gains momentum and starts going up, people stop buying them and they sell. The lucky ones make money. You can do this all day long with one completely valueless company until it gets de-listed from the exchange. The whole system is really quite silly if oyu think about it.
Joe K. 10:34AM (7/16/2009)
The golf Course is Hyatt Hills in Clark, NJ. It was their ball bearing plant back in the day. Never played it, but if they are letting it go cheap....
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Big Mola 11:09AM (7/16/2009)
I'm piissed that they halted trading of the stock all of a sudden, with no warning, in the middle of Friday. It had risen close to $1.30! But before I could sell . . . Frozen. Those basturds!
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Jay Evans 12:08PM (7/16/2009)
Nightcrawler
Stock price fluctuation has very little to do with value. More buyers than sellers, price bids go up. More sellers than buyers price goes down. As I said, the trick is to not be left holding the bag.
Company value only concerns longer term investors.
I suspect this is being driven by some day traders basically playing a game of Russian Roulette.
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George 2:12PM (7/16/2009)
So if the "old GM" is being traded as "MTLQQ", when will the "new GM" be publicly traded, or is it already? I am confused.
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Venom 2:50PM (7/16/2009)
Who are the idiots that are still trading the old GM stock?
Seriously?
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