Will GM get a second bailout or is this it?

Discussion in 'Stocks' started by noob_trad3r, Oct 2, 2012.

  1. GM got bailed out but the company is still the same old GM. The stock has returned -32.6% VS +14.96 (SPY)

    The last time GM was in trouble they got bailed out but will they get bailed out again or was that the last chance. And if they were not bailed out wont Ford stock go up significantly once GM is out of the picture?


    President Obama is proud of his bailout of General Motors. That’s good, because, if he wins a second term, he is probably going to have to bail GM out again. The company is once again losing market share, and it seems unable to develop products that are truly competitive in the U.S. market.
  2. They've been sitting on their butt for a couple of decades, don't expect them to turn on a dime. I think the bad vibe just need more time to get flushed out IMO. But in this market, is very difficult to play catch up.
  3. Einhorn apparently likes GM.
  4. clacy


    GM's market share is shrinking. They didn't do enough to lower their labor costs when they restructured last time.

    They are selling Volts at a loss. Such is life when you get in bed with the government I guess.

    My prediction is that in the next 4 years, after the next recession hits, GM will either have to be bailed out again, or will go away completely.

    I'm not sure the American people will tolerate another bailout. I suppose it will depend on who controls the congress and POTUS at the time.
  5. Einhorn's GM thesis:

    General Motors (GM) “ran into trouble through many years of mismangement.” But current pension concerns and market concerns are “overblown,” he said.

    “We believe that the reality is GM is much healthier now,” he said, after the company closed factories and reducing costs.

    “We don’t expect GM to have to pay US taxes for about a decade,” he said.

    GM has an enterprise value of $6 billion. and “has a cheap valuation,” he said.

    “The consensus forecast which shows good growth is actually too low,” he said. Higher prices and better margins are ahead. The new Cadillac is “outstanding.”

    “It will take time and there will be more losses but GM could expect Europe to break-even within 3 years.”

    GM “can afford to buy [the government's] stake and it will be accretive to earnings.”

    The Chevy Volt is “unsuccessful,” but it’s just “a teeny-tiny part of GM’s business.”

    Einhorn sees “an incremental 2-million-plus units of incremental demand.”

    Total normalized demand for U.S vehicle sales (SAAR) could be 16 million (above the current rate of about 14-14.5 million), he estimates.

    Under that scenario, GM will sell 315,000 additional units, adding $1.10 per share in earnings.

    What should GM do with its cash? “Redeploying into share repurchase is very accretive almost regardless of what GM pays for the stock.”

    Einhorn now expects GM to post normalized earnings of $6 per share by 2014.

  6. GM #1 again due to Govt financing at 0% ... isn't this the same thing we complain about with Chinese companies ?

    GM didn't make money when the economy was good over the last 30 years ... why would anyone expect them to make money when times are tougher ?
  7. This is a great thread.

    Anyone who has checked the GM fundamentals (which are uglier than a piece of dog dung) knows that GM is a joke. How can they declare bankruptcy without throwing these MILLIONS of union buttplugs into the cheap labor retirement package that they belong? !@#$%^ socialistic union tards.

    GM is sending all of it's money to these high school union workers who screwed bolts for a living. The auto sector already has small operating margins. No Mr. and Ms. Union, you do not deserve a boat in Florida, because you didn't earn it! Have a heart attack? Go to the hospital-they can't throw you out. Take some of your own medicine and declare bankruptcy if you have to-you're 80 after all.

    If a double dip recession hits, there is no way GM can survive without more tax dollars (or a real bankruptcy that they deserve). It seems ironic, that the pieces of shit that private investors are smart enough to run away from get subsidized by Mr. and Ms. Jones on Main Street.
  8. I wouldn' t buy GM, but I wouldn't fade Einhorn either.
  9. GM only goes broke on four year cycles.
    #10     Oct 2, 2012