Buffeted by bankruptcy fears, GM’s stock price touches $1
|Buffeted by bankruptcy fears, GM’s stock price touches $1|
The stock traded from $1 to $1.35.
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