Email List Sign Up

Buffeted by bankruptcy fears, GM’s stock price touches $1

Buffeted by bankruptcy fears, GM’s stock price touches $1
General Motors (GM) stock fell to $1 a share Wednesday morning as investors fearing bankruptcy continued to flee the once-mighty blue chip industrial giant.

The stock traded from $1 to $1.35.

Shares of GM on Tuesday fell to 1933 levels before closing at $1.15 a share. The company, which is surviving on federal loans, has until June 1 to restructure its debt or face bankruptcy reorganization, like its smaller Detroit Three competitor, Chrysler.

Six GM executives, led by former GM vice chairman and product chief Bob Lutz, disclosed Monday that they sold almost $315,000 in stock and liquidated their remaining direct holdings in the automaker.

Experts have said that GM’s stock is overpriced, considering that the automaker’s debt-restructuring plan will leave current shareholders with just a 1% stake in the reconstituted company.


"We see an increased likelihood that the shares will decline as the company’s viability-plan deadline approaches," Efraim Levy, an analyst with Standard & Poor’s Equity Research, said in a note.

"In our view, either GM reaches a deal with bond and other stakeholders that will result in government ownership of about 50% of GM common and existing shareholders seeing their interests diluted to 1% stake, or, as we think is increasingly likely, GM will file for bankruptcy protection, making existing shares almost worthless."

GM’s debt-restructuring plan calls for GM to issue about 60 billion in new shares in exchange for debt. Then, GM will immediately do a 100-for-1 reverse stock split, in which shareholders would get one new share of GM for every 100 they currently own. That will boost the price per share, but not the value of the overall investment.

GM recently cautioned in a filing with U.S. regulators that its stock might be delisted from the New YorkStock Exchange if its shares fall below $1 and stays there for 30 consecutive trading days. The NYSE has temporarily suspended its $1 minimum price requirement until June 30 because of the turbulent economy.

Contributing: Reuters

Seniority Lists
Recent Posts!
Bargaining Committee

Mike Herron
Tim Stannard
Zone at Large – 1st
Danny Taylor
Zone at Large – 2nd
Mark Wilkerson
Joe McClure
Chad Poynor
Steve Roberts
Derek Lewis
Bill Cundiff
Kirk Zebbs
Don Numinen
Jay Minella
Danny Bragg
Chris Hill
Rashad Thomas
Keith Oswald
Chris Brown

1853 Officers

Tim Stannard
Mike Herron
Vice President
Darrell DeJean
Financial Secretary
Mark Wunderlin
Recording Secretary
Peggy Mullins
Trustee (3)
Jay Lowe
Dave Clements
Dave Spare
Sgt. at Arms
David C Spare
Ashley Holloway
E-Board at Large (2)
David Ryder
Steve Roberts

GM Unit Chair
Mike Herron
Leadec Unit Chair
Larry Poole
Ryder Unit Chair
Patrick Linck
AFV Unit Chair
Katherine McGaw
Retiree Chair
Mike Martinez

Get Text Alerts


*Standard text messaging rates may apply from your carrier