Will GM acually go Bankrupt or is it a Long term buy?

Discussion in 'Stocks' started by spersky, Aug 1, 2008.

  1. spersky


    GM is in horrible shape. You would have to be crazy to buy it. That is just what makes me want to buy it at this price. I am young and if there is any chance that this company will survive then I would look like a genius if I bought as much GM stock as I could right now. It might take years to recover, but I have some time.

    Afterall, the govenment will bail them out anyway.

    Any ideas, comments, suggestions?

  2. spersky



    What happenes to shareholders if a company files chapter 11? I know that the stock prices collapses, but do new shares get issued when the company reorganizes?

    I think Chapter 11 would be great for GM because they could get out of the ridiculous Union Benifits that are killing them.
  3. bdon


    This is not the 70's, the government has no reason to bail this company out. Ego is the only thing holding this baby back from bankruptcy. Shed the debt, break the union contracts, the stock in the company that emerged from bankruptcy would be worth something. Review Kmart and trade accordingly.
  4. bdon


    shareholders get zip. new stock is issued and they get none. Sometimes secured debt holders of the old company will get shares in the new stock (piddley amounts to that which they lost). But common is unsecured and gets the fat one.
  5. spersky


    I guess that the stock is still at 10 because people are gambling that there will not be chapter 11 in the future.
  6. HSC.1775


    Go check out the price of X ten years ago . . . According to CNBC snd all the "experts" steal was dead . . .
  7. spersky


    Did X file chapter 11?
  8. doli


    How much was the loss?

    15 -- FIFTEEN -- billion.

    Couldn't you start a car company for that?

    Management is the problem at GM.
  9. The stock price is currently a call option with no expiry.
  10. I believe a democratic administration, working with a democratically-controlled congress, would bail out the domestic auto industry.

    I'm not commenting on what party is better or worse on balance, nor am I expressing an opinion on the merits of having the U.S. government intervene (like they did with Bear Stearns) to save a particular company or industry.

    I am expressing my opinion that GM (or Ford) might be a fantastic long term investment depending on what happens in November.

    On the business side of things, Wagoner needs to go at GM. He is not aggressive enough. Elevate Bob Lutz to CEO.

    Ford has the right man in Mulally, but he's only been there (from Boeing) for a short time now, and is already moving to bring European Ford cars, such as the Mondeo and Europe Spec Focus, which are some of the best selling in the world, to the U.S.

    I personally would not have a problem with the U.S. government allowing GM and Ford to work together, expressly exempting them from anti-trust restrictions, to pool their resources to develop more fuel efficient cars, and hybrid/alternative fuel technology.
    #10     Aug 1, 2008