GM Shares Fall Below $1 as Deadline Approaches

GM Shares Fall Below $1 as Deadline Approaches http://www.cnbc.com/id/30999478
Shares of General Motors have fallen below $1 for the first time in 76
years as a Chapter 11 bankruptcy filing for the automaker appears increasingly likely.
GM [GM 0.8968 -0.2232 (-19.93%) ] shares lost more than 22 percent to fall as low as 87 cents in morning trading on Friday. It was the stock's lowest trade since April 18, 1933.
The symbolic decline comes just days away from a government-imposed restructuring deadline of June 1. The company is expected to file for Chapter 11 bankruptcy protection by then, leaving shareholders virtually wiped out.
On Thursday, the automaker offered a new debt-for-equity proposal to its bondholders. The deal would give the government a 72.5 percent stake in the company but made no mention of existing shareholders.
The Obama administration estimates that a General Motors bankruptcy would take at least 60 to 90 days and perhaps longer to complete, a senior official said Thursday.
The official, who spoke on the condition of anonymity because he was not authorized to discuss the matter publicly, would not confirm a specific bankruptcy scenario, but the government's deadline for any filing is on Monday.
President Barack Obama is expected to discuss the automaker's restructuring at that time, the White House said.
On April 30, Obama announced that Chrysler was seeking Chapter 11 protection. Chrysler, GM's smaller rival, is on the verge of stepping out of court protection.
GM and Chrysler are operating under the direction of a White House/Treasury Department task force, which has provided more than $36 billion in bailout assistance to the automakers and their affiliated finance companies.
The government's goal for GM is to eventually return it to profitability, allowing it to eventually sell its shares. But the risks for taxpayers are daunting, with U.S. auto sales near their lowest level in 27 years.
"We will come out of this rid of some of the historic legacy costs that have been dragging us down for the last 20 years or so," GM Vice Chairman Bob Lutz said Thursday at an Automotive Press Association luncheon in Detroit. "We will come out of it with an all new focus on product development."
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Even $1 is a ridiculous price, unless you want to bet on a REALLY long shot.
In a few days, these stocks and bonds may be just poor grade toilet paper.
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HLS wrote:

GM TP or 5 shares of GM stock in each box of Cracker Jacks.
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Agreeded.
The government is going to issue new stock, at least a 300:1 dilution. With Fridays last trade of 75 cents, that means each share is worth no more than 75/300 cents (1/4 of a cent) if it is worth that at all.
Then the government will do a reverse split to keep them listed, say a 1000:1 reverse split. Who knows, maybe 2000:1 so it does not get delisted.
At 75 cents a share on Fridays close, they are grossly over valued.
Even with the governments $69B or more, GM still has plents of debt that companies like Carlyle own. GM has debt in every crevice.
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