Posted: 11/17/2005 5:54:54 AM EDT
|
The papers up here are talking all sorts of fire and brimstone regarding the auto industry, and GM seems to be in the cenrter of the supposed storm. Many of the papers are saying that the liklyhood of a bankruptcy is becoming very apparent. Some give them 6mo. to a year. What say you ARFCOM? abcnews.go.com/Business/wireStory?id=1314876 By ALEKSANDRS ROZENS AP Business Writer The Associated PressThe Associated Press NEW YORK Nov 15, 2005 — An increasing number of investors are betting that General Motors Corp., the world's largest automaker, may be forced to seek bankruptcy protection within the next six to 12 months as it struggles to overcome slumping sales and the high cost of health care benefits for workers and retirees. Concerns about the automaker's future are showing up in the credit default swaps market, where investors effectively buy insurance protection against defaults. Holders of GM debt who want to arrange a hedge against the risk that they won't be repaid are finding that the cost of buying the protection has risen dramatically in recent days. "The markets are telling you that more traders are starting to see a greater risk that a default scenario could happen sooner in time than later," said John Tierney, a credit strategist at Deutsche Bank Securities in New York. "You cannot deny there is a pattern here." GM spokesman Jerry Dubrowski responded by saying the automaker has "no plans to declare bankruptcy," and he noted that GM has about $19 billion in cash on hand. Beyond that, he declined to discuss recent pricing trends for credit default swaps. "Typically we don't comment on stock prices or bond prices," he said. "We don't think it is appropriate to do that." At issue is the nearly $31 billion in debt related to GM automaking operations that ratings agencies already have downgraded to junk status, or below investment grade. Dubrowski said GM's total debt, including debt sold by its General Motors Acceptance Corp. unit, now stands at $276 billion. Credit default swaps for GM are now trading at what is known as an "upfront" basis, meaning a bondholder seeking protection against a default has to pay more money up front because the Wall Street firms arranging the hedges have to pay more to protect themselves. Michiko Whetten, a quantitative credit analyst at Nomura Securities International Inc., said GM debt had previously never traded on an upfront basis. But now that it is, it puts GM in an unenviable category with Delphi Corp. and Delta Air Lines Inc. other companies whose debt traded on an upfront basis ahead of their petitioning for bankruptcy.... ETA: Added article for background. |
Define "deal"! They've already got tons of incentives on them. Frankly I would think you could go in there and - within reason - throw out a lowball number and see what they say. Look up their inventory on line. Find the dealership with the most 'Hoes on the lot and to talk to them at the end of the month. I've always gotten a great deal that way. Edit: Back to topic: As much as it would bum me out, I wouldn't doubt seeing GM filing those papers in the first, say, half of next year. I have no specific information to that timeline but do know that things aren't great, and it seems like there's a bit of a "perfect storm" of bad circumstances hitting at the same time that are effecting them. Namely, they were hoping for a strong October and it didn't pan out that way. |
Exactly. The top officers have cleaned out the kitty (Completely legally, of course, since it's "bonuses".) so, time to bail. Actually, other than that, no great loss. They haven't built many decent cars in 40 years. Sure, the Corvette. That should be somewhat independent, anyway. GM will ruin Corvette the same way CHrysler, and now Damnler has ruined Jeep. |
|
I failed business calculus so help me out here. Surplus earnings are often disbursed to the shareholders through dividend checks. Ok. GM has negative earnings, they lost $5.79 per share. Yet, they pay a dividend of $2.00 per share. So they're losing money and paying out over a 9% dividend yield  Clueless morons. FWIW the institutions have been snatching up GM stock in the last few days. |
Firebird, Camaro, most Saturns will run until the day their wheels fall off. And, as for "ruining the Corvette", the newest models are most aesthetic... and though I can't speak on their mechanics due to lack of experience, I doubt they are that hard up in that area. |
It's SOP to cancel your stock during a bankruptcy. FWIW I have some stock worth .02 per share right now  Bondholders can expect to get most of thier money back in the event of a bankruptcy. Stockholders who own common stock, even if you own 10-15% of the company, are often not even allowed in the court room. |
the red tag sale has Hoes that are stickered at about $40k for $29k or so....not too shabby as it is |
|
Two years ago I owned a good amount of Hughes Electronics stock. It was owned by GM and was their only money making company. They wanted to sell it and bring in some much needed capitol but kept screwing around with buyers until it lost a lot of value. ...its terrible how this comes back to haunt you, uh GM... 
|