mgremlin asked:
With all the media identifying that Common Motors stock is potentially worthless, with a rumored business intent of a reverse split of 100 to 1, why is the stock price rising on the Pink Sheets? If the stock is worth potentially pennies, why is it trading at a $1.00? Are these just day traders playing on the rumor mill until more concrete info is released? Is this worth investing money into? What could make or break this stock to a point of worth investing into or avoiding altogether?
November 29th, 2009 at 4:25 pm
they didn’t have the sense to stay with the gas efficient foreign cars .now look at what happened 10 years later. i don’t think there going to meet OBAMA standards .GM is probably going to be finished for at least 5 years till the unscramble the mess they made with staying up with the times .
December 1st, 2009 at 10:53 am
No Deal Howie! ~music~
What’s Happening? !!
No, not the 70′s TV show, I mean with GM:
Two words:
“short covering”
Two more words:
“naive speculators” (the ones who think existing GM stock will be worth something again in the “long term”)
Here is why (again) that “long term” and “GM” don’t work:
The company is bankrupt.
The company is bankrupt.
The company is bankrupt.
Here is my answer post history of every GM financial question you would ever want to know.
edit:
1. “…with a rumored company intent of a reverse split of 100 to 1…”
Yes, this was discussed PRIOR to bankruptcy (05-05-09).
GM proposed (paraphrased) ‘that the par value of GM stock would be lowered to 1 cent then 1-100 reverse split would follow. (Page 1, SCHEDULE 14C Filing in May 2009, PRIOR to BK.)
The above scenario is not as likely now. There have been no official reports I have found to support that a reverse split of any kind is still on the table.
The current view is GM shareholders will be wiped out upon completion of the bankruptcy. There is a ton of articles supporting this end including GM’s own may 2009 SEC filing warning of such wipe out of its stock.
********************************************************
05-06-2009 From General Motors’ OWN SEC Filing:
GM states – QUOTE:
“IF WE SEEK RELIEF UNDER THE U.S. BANKRUPTCY CODE, WE BELIEVE THAT IT IS LIKELY THAT EXISTING GM COMMON STOCKHOLDERS WOULD RECEIVE NO CONSIDERATION FOR THEIR SHARES OF GM COMMON STOCK (Bankruptcy Relief, Page 9, Parr 2).”
********************************************************
05-06-2009 (Reuters)
“GM details plans to wipe out current shareholders”
05-29-2009 (Fox)
“FAQs on GM’s Impending Bankruptcy”
06-02-2009 (CNN)
“GM bankruptcy: What you need to know”
06-04-2009 (Wall Street Journal)
“GM Shareholders Likely End Up Empty Handed”
I’ve listed 4 major news sources that all suggest the same end for GM, there are more, but I picked 4 big media outlets.
2. “why is the stock price rising on the Pink Sheets?”
Again, this is massive short covering. On 05.27.2009 (GM Post #32, I discussed what might happen to GM’s stock during bankruptcy.
The stock fell about 33% on the BK filing but had fallen 30-33% the day prior and we all know it has been plunging for the last 2 years.
In GM Post #32, I also discussed short covering and a “Dead Cat Bounce.” This is happening right now.
I also stated that “The stock should be d-listed shortly after, and a new symbol should follow.” This occurred 1 day after the BK filing.
I further talked about… “I am CONSIDERING, maybe maybe maybe buying this technically worthless stock AFTER most of the initial value gets wiped out on a BK filing. Only because I am anticipating that there will be a mass number of people who will make the wrong call and buy the stock not as a trade but as a “long term investment.”"
On the day of GM’s official BK filing, (06-01-2009) I actually went in and bought a block (100 contracts, controlling 10,000 shares) of real cheap call options (about 16 1/2 cents) that have been trading wildly. I sold these call options on 06-09-2009 (about .5017 cents) w/ about a 185.53% net gain. Isn’t that crazy? The company’s stock is worthless by all fundamentals and technically worthless supported by a legal bankruptcy.
This is what I meant by short covering, dead cat bounce and speculator buying. I was just trading that this would happen.
I had no idea that the stock would have rallied this far based on this massive short covering movement. For most people who bought GM post BK, it was for the wrong reason. The reason was for “an investment” as I had been reading, not as a “speculative high risk trade.”
I still don’t recommend anyone do this or buy GM stock, because the end-game result is pretty well publicized as stated above.
Reference from the quotes citing GM Post #32:
GM Post #32, 05-27-2009:
“GM stock purchase – predicted price shifts?”
This is GM Post #71
December 4th, 2009 at 10:40 pm
No Deal.
Look at the balance sheet of GM, my friend.
It owes more than $50 Billion (That’s with a “B”) than it has in assets and the reorg plan call for some $25 Billion more from Uncle Sam.
How on earth can you imagine that the common stockholder of the old GM (now trading OTC) is going to get one single penny from the bankruptcy process?
It isn’t rumor. It’s fact. Take a look at page 25 of Barron’s today: The new GM will be divided as follows: 60.8% of the shares to Uncle Sam, 17.5% to the UAW. the governments of Canada & Ontario get 11.7%, and 10.0% to the bondholders. That’s 100%.
December 5th, 2009 at 5:28 am
It is available in penny cents, if you have courage grab it.
December 6th, 2009 at 1:32 am
Don’t risk it. The stock can be cancelled any day now. Just because it is trading at $1 there is not guarantee it won’t fall to 30 cents or so after market. It is also my understanding that when GM emerges from bankruptcy, it may not become public for sometime meaning there won’t be any stock offerings.
December 8th, 2009 at 10:16 pm
gmgmq is being manipulated, i tink. the reverse split ruumors are part of the manipulation.
stay away from this POS! cancellation is nigh.