According to Reuters/BBG, GM's Form 10-K contains a statement from the auditors that 'There's substantial doubt GM can continue as a going concern'
Some more headlines: *GM'S HENDERSON TO GET 30% ANNUAL SALARY CUT FOR 2009 WSJ: GM Auditors Raise Doubts on Auto Maker's Viability *GM SAYS IF CHAPTER 7/11 FILED EVENT OF DEFAULT ON $11.4B LINE *GM WOULD FILE CHAP. 7 WITHOUT SUCCESSFUL PLAN OR DIP FINANCING GM Says Chief Wagoner Was Paid $5.4 Million in 2008 (Update2) *GM 10K CONTAINS MATERIAL WEAKNESS ON REPORTING AT DEC. 31 *GM SEES SIGNIFICANT LOSS THAT COULD EXCEED $1B ON SAAB :GM US *GM 4Q ALSO HAS IMPAIRMENT $5.1B ON GMAC STAKE INVESTMENTS *GM 4Q HAS IMPAIRMENT CHARGES $2.5B ON AUTO EQUIPMENT, OTHERS GM Says Chief Wagoner Was Paid $5.4 Million in 2008 (Correct) *GM LEVEL 3 FAIR VALUE MEASUREMENTS LIABILITIES AS OF DEC. 31 *GM LEVEL 3 FAIR VALUE MEASUREMENTS TOTAL LIAILIBITIES $2.33B *GM WITHDREW $1.4B FROM PLAN ASSETS OF NON-UAW VEBAS IN 2008
GM bankruptcy is not out of the question, Geithner might realize they will have to take the gamble since the bondholders, unions think they are too big to fail
I find it amusing that the market thinks the concern over "going concern" is actually considered news. As if some investors woke up this morning and are surprised that GM can't survive without govt support. What a shock !
The mkt's view is not the point... Clearly, the fate of GM and, as a result, of a whole chunk of the American economy, depends on the outcome of a complex political process, determined by the interplay between moral hazard and fear of disorderly unwinding. The fact that the auditors are weighing in is another little meaningful input into the puzzle, that's all.
yes that's true, ("another little meaningful input into the puzzle"), thanks for your thoughts again Martinghoul
"There's substantial doubt GM can continue as a going concern" Auditors do what auditors always do. They have to be conservative, its their job and they don't want to take heat later for failing to "reveal" this critical fact. Seriously, is there anyone that hasn't known for many months? GM is toast the only question is how long the gov't will continue to prop them up.
Rightie... Has a GM auditor made such a statement in official documents before? Not to my knowledge, which makes the statement news, by definition. As to its significance, pls see my previous post.
Welcome to earth. I hope you enjoy your stay here. Those of us that have been here awhile have already priced in this risk. <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2333951