Who the fuck cares? The company is worthless. Didn't cerebrus buy Chrysler? Let me tell you how much that company is worth now. I'd put a double 0 on that. Too bad, 5 billion gone on that pos. Anyway. Just because the stock went up doesn't mean people are buying for longs. They were shorts covering. In the end the company is worthless. I've never seen any company not file for bankruptcy when it's a single digit stock with 10's of dollars of ni losses. It's already bankrupt, and so is F. Restructuring is the only option I see out of it, which means declaring bankruptcy. That's not just a simple statement to make, but they don't really have any other options because even with the loan they'd just be paying their debtors to avoid technical default. You see? There aren't any other options. They will declare bankruptcy, because the strings attached will probably have that phrase in there.
Oh, this is funny. Going by Benjamin Graham's method of net current assets GM is worth -$205/share. F about -$78/share. See? A bankrupt company. All liabilities and no residual value. The cash is as good as toast if it were to go in.
While I can say that specifically about GM and F being short covering rallies, I can't say the same for the market. I think longs are being built around here for a few years. There are still stocks out there that didn't lose all their shareholder equity in one or two quarters. Some even have growth to show for it. Those are the companies that appear to be surviving, and will be a lot higher. I think the thread was on GM and F, which I've written off as worthless. C probably not so much. They still have some very small value left compared to where they were. While C is still in the same boat with $4 per share losses and an $8 stock, the difference is that they are temporary writedowns that I can see an end to. I can't, <i>however</i>, ever see an end to the blood bath that is the big 3 automotive industry.
I don't think the Pacific ocean is a big enough body of water to describe the bath that is GM. It was a 400 billion dollar company to a few billion now.
The same way I would explain Enron bouncing after all the news came out - there are always people willing to gamble on a DCB. And I don't mean that in a derogatory way - did the same thing with Fannie - there's nothing wrong with trying it as long as you keep your downside covered against any "surprises".
Yeah, the more I think about it, the more I think, I'll just short 100 shares. Cover at 8 which is $1 beyond the highest analyst estimate of price one year out, and try to cover at 2.5, or maybe half at 2.5 and the other half at 0. Close no matter what in march.
You people are missing the point of the OP's question. They never said they wanted to buy GM and/or Ford for the LONG, they asked if they should buy it on Monday considering they have been going up because of potential bail out news. I bought Ford when it was around 1.40. I am going to hold it for a day-a few days depending on how it looks. Ford increased around 12% after hours on Friday, so I don't believe the momentum has left yet. Holding out for a longer period is just too risky. I wouldn't buy these stocks for the long though, as people on here have said.