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GM Shareholders: Poof!

hypocritexposer

Well-known member
GM Shareholders: Poof!

You didn't/don't hold the stock, did you?

If so, I hope you sell tomorrow, assuming it opens over 2 cents/share.

Seriously.

No really, I'm not kidding.

In a filing with the SEC late this afternoon it was disclosed that the GM "restructuring" would:

* Increase the number of authorized shares to 62 billion (!)
* Reduce the par value to one cent.
* Effect a 100:1 reverse split for the existing shareholders.

The effect of this as disclosed would be that the existing common shareholders would have their holdings reduced in value to one percent of their current market value.

So as of 4:00 Eastern today, your $1.85 stock price would be.... drum roll please..... $0.0185 per share.

There is a lot of other material in this filing related to the restructuring of the debt. The exchange offers appear to have gone from 2/3rds reduction in the outstanding debt to a ninety percent reduction, effectively paying debtholders no more than a dime on the dollar.

Oh, and it gets better. If the "negotiation" is as was done with Chrysler, saying "no" won't do you a damn bit of good - the government will, I would assume, threaten you and then file an involuntary Chapter 11 and attempt to cram this down your throat (or up a much less-desirable place.)

The UAW does not get hit for 90%. The VEBA will get 50% in cash and the other half in stock - newly issued stock - which, of course, is part of the 99% you won't own when this "restructuring" is completed if you are a common stock holder as of tonight. Their effective hit? Zero, assuming the share price does not collapse (again) when this is all said and done.

Oh, and if all this is not completed by agreement before June 1st? The filing makes clear: They're going to see the judge.

For those of you who were trapped in this position since GM was in the $30s and foolishly thought your stock had value, you were wrong.

You're done; God (in the form of The Administration) has spoken and for you, the game is over.

Expect the price of the stock to collapse in the morning.

You did sell today, didn't you?

PS: You think there's a thing called "senior debt" in this country any more? Uh, no. There is not. The Capital Structure no longer has ANY legal meaning. Guess what this does to the banks in particular (anyone with government "rescues") along with the potential for ANY firm in the US? Yep.

Disclosure: No GM position other than "I told you so!"

http://market-ticker.org/archives/2009/05/05.html
 

don

Well-known member
try reading some of nouriel roubini's analysis of what's happening with chrysler and gm. more objective and constructive than the little rant you pasted.
 

don

Well-known member
it's easy to say let everybody go bankrupt and we'll all start over but some people seem to realize there are issues beyond pure economics. do you have enough military/police power to deal with all the social unrest if you just let law of the jungle prevail?
 

Sandhusker

Well-known member
don said:
it's easy to say let everybody go bankrupt and we'll all start over but some people seem to realize there are issues beyond pure economics. do you have enough military/police power to deal with all the social unrest if you just let law of the jungle prevail?

Law of the jungle? Where are you getting that from?
 

Mike

Well-known member
don said:
what is the alternative? have any better solutions?

Boot the UAW out of existence...........................................

Then private investors would come in and gobble up those shares knowing full well that the Unions ate GM, Chrysler, and Ford out of house and home.

But no..............Zer0's got to keep the Unions afloat. It's Election Payback time! :lol: :lol:

These car companies were/are nothing but Health Care and Pension Fund holders using the car manufacturing as a means to support it... :mad:
 

don

Well-known member
yeah i guess it's really just that simple. so why didn't management at gm and chrysler figure it out? maybe the uaw is just one factor; horrific management is just as much at fault.
 

Sandhusker

Well-known member
don said:
yeah i guess it's really just that simple. so why didn't management at gm and chrysler figure it out? maybe the uaw is just one factor; horrific management is just as much at fault.

There's a lot of issues with the car companies, but bankruptcy court is where everything gets sorted out. Those courts were created for a reason, and BK has helped many companies get their act together and come out viable.
 

Mike

Well-known member
don said:
yeah i guess it's really just that simple. so why didn't management at gm and chrysler figure it out? maybe the uaw is just one factor; horrific management is just as much at fault.

They knew it was coming........ But when the Foreign auto makers recently moved down south to stay out of the UAW trap, GM etc. couldn't just raise the price of vehicles anymore...........and that no longer allowed them to be competitive.
 

Mike

Well-known member
Sandhusker said:
don said:
yeah i guess it's really just that simple. so why didn't management at gm and chrysler figure it out? maybe the uaw is just one factor; horrific management is just as much at fault.

There's a lot of issues with the car companies, but bankruptcy court is where everything gets sorted out. Those courts were created for a reason, and BK has helped many companies get their act together and come out viable.

This is not your ordinary "Bankruptcy Court". From what I'm reading the Unions will take only a token pay/pension plan cut.
 

hypocritexposer

Well-known member
After frittering away 4 billion "bailout" taxpayer dollars to "save the company," Chrysler just announced it was going into bankruptcy. Not the normal Chapter 11 bankruptcy, but a "managed bankruptcy" that will require at least another 8 billion in taxpayer dollars, while, at the same time, turning 55 percent of the ownership of the company over to the United Auto Workers (whose contracts and work practices helped destroy Chrysler) and 35 percent of the equity to Fiat motors of Italy (a company that is contributing no cash - hmmm). U.S. and Canadian taxpayers are putting up a lot of cash but only get to share the remaining 10 percent ownership.

http://www.washingtontimes.com/news/2009/may/06/political-stock-picks/
 

Broke Cowboy

Well-known member
I resent my tax dollars bailing them out - big time - money will disappear in a cloud of smoke over the next few months and they will come for more.

Almost all of it to leave the country or end up some bonus cheque

A person cannot borrow his way outof debt any more than a country can

BC
 

Steve

Well-known member
Chrysler LLC will not repay U.S. taxpayers more than $7 billion in bailout money it received earlier this year and as part of its bankruptcy filing.

back in the good old days.. when a loan company worked with a person and the person didn't repay,.. it reflected badly on the persons reputation..

there were terms such as dead beat...

Now,... the debtors are the bad guys and called "speculators" ,..

hopefully chrysler/fiat will sell off Jeep and a respectable corporation can take it over..
 
A

Anonymous

Guest
Steve said:
Chrysler LLC will not repay U.S. taxpayers more than $7 billion in bailout money it received earlier this year and as part of its bankruptcy filing.

back in the good old days.. when a loan company worked with a person and the person didn't repay,.. it reflected badly on the persons reputation..

there were terms such as dead beat...

Now,... the debtors are the bad guys and called "speculators" ,..

hopefully chrysler/fiat will sell off Jeep and a respectable corporation can take it over..

* U.S. Treasury gets 8 percent of equity in new Chrysler and right to choose four company directors.

* Governments of Canada and Ontario (the national government and government of the province) will together get 2 percent of equity in new Chrysler.
 

hopalong

Well-known member
Oldtimer said:
Steve said:
Chrysler LLC will not repay U.S. taxpayers more than $7 billion in bailout money it received earlier this year and as part of its bankruptcy filing.

back in the good old days.. when a loan company worked with a person and the person didn't repay,.. it reflected badly on the persons reputation..

there were terms such as dead beat...

Now,... the debtors are the bad guys and called "speculators" ,..

hopefully chrysler/fiat will sell off Jeep and a respectable corporation can take it over..

* U.S. Treasury gets 8 percent of equity in new Chrysler and right to choose four company directors.

* Governments of Canada and Ontario (the national government and government of the province) will together get 2 percent of equity in new Chrysler.

What did the unions get?????
Who really got screwed???
 

Mike

Well-known member
hopalong said:
Oldtimer said:
Steve said:
back in the good old days.. when a loan company worked with a person and the person didn't repay,.. it reflected badly on the persons reputation..

there were terms such as dead beat...

Now,... the debtors are the bad guys and called "speculators" ,..

hopefully chrysler/fiat will sell off Jeep and a respectable corporation can take it over..

* U.S. Treasury gets 8 percent of equity in new Chrysler and right to choose four company directors.

* Governments of Canada and Ontario (the national government and government of the province) will together get 2 percent of equity in new Chrysler.

What did the unions get?????
Who really got screwed???

Unions get 55% don't they? Like I said, it's payback time for the UAW. :roll:
 
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