GM stock @ Chapter 11

[Pearlpam]

Although shares of General Motors Corp. have almost certainly been made worthless by the carmaker's entry into Chapter 11, the stock's price actually resurged from its lows Monday.GM shares lost more than 22 percent to fall as low as 87 cents in morning trading. It was the stock’s lowest trade since April 18, 1933, according to the Center for Research in Security Prices at the University of Chicago.

[aquaswim47]

Originally Posted by Pearlpam

Although shares of General Motors Corp. have almost certainly been made worthless by the carmaker's entry into Chapter 11, the stock's price actually resurged from its lows Monday.GM shares lost more than 22 percent to fall as low as 87 cents in morning trading. It was the stock’s lowest trade since April 18, 1933, according to the Center for Research in Security Prices at the University of Chicago.

SELL SELL SELL

The pink sheet stock is still the old company. The new shares are not that good of a deal with a assets/debt ratio of 1.046 vs. Ford's assets/debt ratio is 0.92.

[t97226]

Since GMGMQ common stock ceased trading on Friday will it restart? And if not, does that mean that an investor would get 1 stock in the new company for every 100 of the old that is owned? If this is not the case, what is the value in holding GMGMQ stock?

To post a theory as to why people have kept trading GM stock. Everyone has been buying on the idea of the governemnt making sure that GM would not fall. The problem is that no one knows what this means.

[aquaswim47]

Originally Posted by t97226

Since GMGMQ common stock ceased trading on Friday will it restart? And if not, does that mean that an investor would get 1 stock in the new company for every 100 of the old that is owned? If this is not the case, what is the value in holding GMGMQ stock?

To post a theory as to why people have kept trading GM stock. Everyone has been buying on the idea of the governemnt making sure that GM would not fall. The problem is that no one knows what this means.

There is no value in the shares, at least there shouldn't be.

[Fredledingue]

This the NEWS I was reading today.

They first said old GM shareholders will get 1% of the New GM and it as asssumed that old GM shares will be diluted in the new GM shares. Now it seems it's not the case and that there are two separate entities.

Perhaps there will be a distribution to the shareholders before a certain date and while the old shares are worthless, shareholders as of before bankrupcy will still recieve something, but I have doubts. Perhaps it's about certain shareholders.
It's interresting that old GM stock holders own all the bad stuffs (debt, liquidation etc) while Obama and the unions own the New GM, ready for a new start and innovative small car design, free from all the past debts and misguidance.
In fact what they did was to create a new comapny that bought some of the assets and left the old company with the problems.

Why two companies in bankrupcy then? At first they have GM in bankrupcy, second they have new GM out of bankrupcy and old GM still in bankrupcy. That's non sens to me.

But the shareholders will have nothing. 0% because that's the purpose of selling common shares: Get the money, then make the share worthless and move on.
IMO it's the end of the common stock holding era because no one will trust such type of security where you lose all half of the time and 90% the rest of the time, when you are lucky.

Originally Posted by DETROIT (AP) -- Tom Krisher and Dan Strumpf, AP Auto Writers

Shares of the old General Motors Corp. lost half their value Wednesday after the stock symbol was changed to reflect the company's new name, Motors Liquidation Co.
Trading of GM stock under the symbol GMGMQ had been suspended since Friday afternoon by the Financial Industry Regulatory Authority, which regulates over-the-counter stocks. On Wednesday, the authority changed the symbol and allowed trading to resume.
Motors Liquidation shares fell 57 cents, or 50 percent, to 57 cents in midday trading.
FINRA suspended trading because investors apparently confused the stock with the new GM, which emerged from bankruptcy protection on Friday as a leaner company free of the burdensome debt and contracts that had plagued the old automaker.
The new GM is a private company that is majority owned by the U.S. government. It plans to issue new shares perhaps as early as next year.
"We certainly were concerned that there was confusion in the marketplace that people weren't sure whether they were buying the new GM when it emerges from bankruptcy or whether they were buying the bankrupt portion of the stock," said Steve Joachim, executive vice president of transparency services for FINRA.
Motors Liquidation is the old GM, which is still under bankruptcy court supervision. It owns the unwanted assets and the liabilities of the old GM and was set up to sell off the assets to pay creditors as much as possible.
The new symbol, MTLQQ, is designed to avoid confusion with new GM, FINRA said in a statement.
The stock had been traded over-the-counter since it was knocked off the New York Stock Exchange when GM filed for bankruptcy protection on June 1. But despite warnings from GM that it soon would have no value, trading continued. Trading was suspended on Friday after the shares rose 37 percent to $1.15 after GM emerged from bankruptcy protection.
GM spokesman Tom Wilkinson said despite numerous warnings and statements from GM that the stock was likely worthless, GMGMQ continued to climb.
"We were concerned, Motors Liquidation was concerned, I think the regulator was concerned that people were trading the stock not understanding what it was," Wilkinson said.
FINRA spokeswoman Nancy Condon also said some investment Web sites and spammers had been falsely touting GMGMQ's value.
"They're just taking advantage of some confusion in the marketplace," said David Kudla, CEO of Mainstay Capital Management in Grand Blanc, Michigan, which manages investments for many GM employees and retirees. "They drove artificial interest in the stock by taking advantage of the confusion."
The strategy worked on Friday when the stock rose dramatically before trading was halted, Kudla said.

link

[aquaswim47]

Originally Posted by Fredledingue

But the shareholders will have nothing. 0% because that's the purpose of selling common shares: Get the money, then make the share worthless and move on.

link

Yeah anything like that and the bondholders feel shafted because they are supposed to be superior to the stockholders. The IRS and prior employee payments are supposed to go before senior bondholders and that's it. That's why you should run the company well so you don't need to enter bankruptcy.

It was like when people were calling this a recession before July of 2008. Once we hit negative growth for 2 consecutive quarters (i.e. January of 2009), it was an official recession. It ended in June of 2009 so the recession lasted 11 months.