How long until "New" GM shares match the "Old" GM shares? "Quality" will
Old GM shares drop in value with symbol change
Shares of the old General Motors Corp. lost half their value Wednesday
after the stock symbol was changed to reflect the company’s new name,
Motors Liquidation Co.
Trading of GM stock under the symbol GMGMQ had been suspended since
Friday afternoon by the Financial Industry Regulatory Authority, which
regulates over-the-counter stocks. On Wednesday, the authority changed
the symbol and allowed trading to resume.
Motors Liquidation shares fell 57 cents, or 50 percent, to 57 cents in
FINRA suspended trading because investors apparently confused the stock
with the new GM, which emerged from bankruptcy protection on Friday as a
leaner company free of the burdensome debt and contracts that had
plagued the old automaker.
The new GM is a private company that is majority owned by the U.S.
government. It plans to issue new shares perhaps as early as next year.
“We certainly were concerned that there was confusion in the marketplace
that people weren’t sure whether they were buying the new GM when it
emerges from bankruptcy or whether they were buying the bankrupt portion
of the stock,” said Steve Joachim, executive vice president of
transparency services for FINRA.
Motors Liquidation is the old GM, which is still under bankruptcy court
supervision. It owns the unwanted assets and the liabilities of the old
GM and was set up to sell off the assets to pay creditors as much as
The new symbol, MTLQQ, is designed to avoid confusion with new GM, FINRA
said in a statement.
The stock had been traded over-the-counter since it was knocked off the
New York Stock Exchange when GM filed for bankruptcy protection on June
1. But despite warnings from GM that it soon would have no value,
trading continued. Trading was suspended on Friday after the shares rose
37 percent to $1.15 after GM emerged from bankruptcy protection.
GM spokesman Tom Wilkinson said despite numerous warnings and statements
from GM that the stock was likely worthless, GMGMQ continued to climb.
“We were concerned, Motors Liquidation was concerned, I think the
regulator was concerned that people were trading the stock not
understanding what it was,” Wilkinson said.
FINRA spokeswoman Nancy Condon also said some investment Web sites and
spammers had been falsely touting GMGMQ’s value.
“They’re just taking advantage of some confusion in the marketplace,”
said David Kudla, CEO of Mainstay Capital Management in Grand Blanc,
Mich., which manages investments for many GM employees and retirees.
“They drove artificial interest in the stock by taking advantage of the
The strategy worked on Friday when the stock rose dramatically before
trading was halted, Kudla said.
Shares of the former GM trade on the over-the-counter Pink Sheets
system, which offers quotes for stocks that do not meet minimum
requirements to list on an exchange. Many of the companies, for example,
don’t make filings with the Securities and Exchange Commission.
But the new GM and regulators caution that the shares will almost
certainly have no value because shareholders fall in line behind
creditors whose claims aren’t expected to be met.