One Response to “When will GM shares begin trading again?”

1. Net Advisor says:

   July 19, 2010 at 4:10 pm

   The GM that you see trading right now (GMGMQ) on OTC BB may continue to trade until:

   The bankruptcy court officially approves the liquidation of “bad” assets held under this old GM, then final closure of GMGMQ to cease trading – value to be zero.

   This GM (GMGMQ) will never trade again thereafter, and will never become available to existing or future GM#2 stock holders once the BK court has officially dissolved old GM.

   GM has created a new company or in the process thereof, and the stock to be controlled by the US Gov, Canadian Gov, the UAW and 10% to certain bondholders.

   I would not rush to expect to see a GM#2 IPO anytime soon. If that happens, that would be a bad move for GM as the company is still weak and sitting in a terrible time for auto sales regardless of bankruptcy.

   GM would be wise to wait for a new IPO in say 3-10 years, or until the economy, GM auto sales and consumer credit issues are fairly resolved or improving significantly and consistently; and that would not mean 1-4 quarters.

   Some people in Washington (DC) are considering a new issued GM IPO in 1-2 years, but I think this kind of thinking is rushing it.

   GM needs to have the earnings power, and market share to justify any new GM#2 stock price and enough market cap to repay the some $50 Billion+ back to the tax payer. Right now, old GM has a market cap of about $708 Million (@$1.17) to be liquidated to existing creditors, none to stock holders, and new GM has no official market cap just yet.

   Also, I’m going to go on record with my current view in saying that when a GM IPO does come out, I do not expect it to soar like a .com stock. A ton of (inexperienced/ amateur) investors will think that it will, and that they will get rich off GM stock ‘because GM once was low 101 years ago, and got big, blah blah blah.

   We’ll my answer to that kind of thinking is that the Dinosaurs existed for 160 million years and they got big and they all died too.

   And further by all accounts, GM’s existing stock will end up at ZERO after anyone still holding it for up to the last 101 years. Even Chrysler has been bailed out twice.

   Chrysler Corporation Loan Guarantee Act of 1979

   04-30-2009
   Chrysler files for bankruptcy protection

   You will see dozens of GM IPO questions on Y!A (watch).

   GM has to compete with Ford, Toyota, and let’s face it, everyone else, all who have not been in bankruptcy, have gained sales and market shares from GM.

   GM must build cars that people want, and price them at what people are willing to pay. Anything short of that, and GM could become a Chrysler II (Two bailouts by the gov).

   IPO Pay Off?
   In order to pay everyone off, GM will have to issue a ton of new shares. I would expect that the IPO to trade flat to mixed on the 1st day. I would not expect to see even a 10% gain on the IPO unless GM has some stellar cars that everyone has to have.

   I’ve been on record saying that the GM Volt won’t save GM – it is too costly and you can’t drive it very far before recharging. It is not practical. It is a waste of tax payer money to force legislate green cars, when they cost a lot more than other cars on the market, and can’t go very far on a single charge.

   If a GM IPO comes out too early which may happen, I would expect the stock to trade below that IPO price within 0-6 months, then rebound IF conditions warrant it.

   If the IPO comes out too early, and if car sales and the economy are about the same as it is now, new GM stock could be under a lot of pressure.

   GM would need to grow some 50 fold (over $50 billion) before an IPO comes to market in my current view. Knowing the gov, they will rush this IPO anyway for political reasons, not sound financial reasons, so Obama can take credit for “saving GM, saving jobs and bringing them back from the brink.” Whatever.

   The facts are that (1) GM was forced into bankruptcy by the US gov (Obama et al) who seized majority control over GM; (2) that the US Gov to spend some $50+ Billion to save a few hundred thousand jobs at tax payer’s expense; (3) that the US economy was and is still losing upwards of 500,000 jobs a month despite all this “stimulus” and muti trillion-dollar bailouts and guarantees.

   So I would not be spending too much time thinking about a GM IPO or owning the existing OTC BB GM stock.

   To read my GM post history since about June 2008, they can be found here:

   71 GM Posts here:

   GM Post #72 here:

   GM Post#73 here:

   I’ll try and consolidate these posts on the main Yahoo blog when I can.

   This is GM Post #74

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