$11: GM Stock Falls Hard At Market Open On Goldman Downgrade

[Perian]

Link: http://biz.yahoo.com/rb/080626/autoc...achs.html?.v=2

Thursday June 26, 9:31 am ET

(Reuters) - Goldman Sachs downgraded General Motors Corp to "sell" from "neutral," and added the stock to its "Americas Sell List," saying the main risks for the automaker included likely equity dilution, dividend cut and cash burn.

GM shares, which have lost 47 percent of their value since the start of the year, were down nearly 8 percent at $11.81 before the bell on Thursday.

Analyst Patrick Archambault, who also cut his ratings on Lear and Tenneco, said he expects GM shares to continue to underperform as market fundamentals deteriorate which exacerbates liquidity concerns.

He cut his 6-month price target on GM stock by $8 to $11.

"We think GM's automotive cash flow burn this year and next is likely to lead it to look to raise capital, which we believe could lead to significant shareholder dilution and/or a cut to the company's dividend," Archambault said.

[Mikkoo]

Yeah, I'm feeling the pinch as a stockholder. I've lost a fair share of money.
When looking at the stock price, you need to go back basically three decades
before you'll see GM's stock price this low. I still see great value in China, and I'm
inclined just to stand pat and ride out the storm, even if it lasts a year or
two.

[wescoent]

The price to take over General Motors is $3.24 billion.

Daimler-Benz bought Chrysler in 1998 for about $36 billion.

Jaguar and Land Rover just got sold to Tata for about $2.3 billion.

GM PAID Fiat $2 billion dollars just to avoid having to take it over.

Now, if only Fiat locked that money in an account somewhere, then turned around and bought 51% of GM with it...

[windvale]

Man ! The hits just keep coming here...

It does seem like the financial community/industry is losing confidence in GM. This will make it even more expensive for GM to borrow money.

Not good...

[I-Love-Pontiac]

As CNBC pointed out their stock price hasn't been this low since 1955. Amazing

Didn't mgescuro recently buy a bunch of GM's stock? Poor guy

[FierySolstice]

This calls for new management!!! Now how can that happen?

[drew770]

With a falling stock price, shrinking market share, no Wall Street confidence and a severe cash burn, Why is Wagoner still in charge?

When will the board ask for answers and solutions to these problems. This has to be the weakest corporate board in America.

Waiting on a miracle car to save all of GM (Volt) is not a solution.

Drastic times call for drastic measures and GM needs to have some balls to make real decisions.

[K-1]

Originally Posted by drew770

With a falling stock price, shrinking market share, no Wall Street confidence and a severe cash burn, Why is Wagoner still in charge?

When will the board ask for answers and solutions to these problems. This has to be the weakest corporate board in America.

Waiting on a miracle car to save all of GM (Volt) is not a solution.

Drastic times call for drastic measures and GM needs to have some balls to make real decisions.

Perhaps the shareholders should be voting in a new board. Wagoner is far from the root of all GM's problems.

[Cortazzo]

Get Buickman on the Board, the company literally can't do any worse than what they're doing!!! Shame too, because GM does make good cars and trucks now.

[Ming]

Originally Posted by K-1

Perhaps the shareholders should be voting in a new board. Wagoner is far from the root of all GM's problems.

True, but you have to admit the way that Rick Wagoner has seemed to dodge fire from all but a few vocal people like Buickman is a bit amazing, considering the fall in stock price over the last several years.

I do blame Rick and Bob for their idea that it would take $8 gasoline ("European Levels" to quote Bob) for people to start wanting small cars. They were wrong, and I fear they will be wrong again.

Even "Member1" has a point about the Tahoe Hybrid nobody wants, and a $40,000 Volt not being a panacea for GM's woes.

Look at HP's (and by extension pre-merger Compaq's) turnaround under Mark Hurd.

Does anyone think that Mark Hurd would still have a job with HP if HP was seeing the kind of loss in market share and plummeting stock prices that have gone on under Rick and Bob?

Rick seems like a really nice guy -- the kind of guy you don't want to criticize too harshly just because he seems like a kindly manager or neighbor. But the nice guy thing can only go so far in deflecting bullets for clear missteps and mistakes in strategy.

Bob on the other hand seems a bit arrogant. Which is OK when you're RIGHT.

I'll say it again -- leave Bob Lutz in charge of how vehicles LOOK ---- but get a young "Wired" engineer-geek type (some genius college hire) in at GM who obsesses over the latest technology and small cars. The last thing we need at the technology top now with gas prices where they are is someone who grudgingly agrees to throw a few token small cars and alternative fuel vehicles our way when his real love is for high horsepower thrills, sleek euro roadsters, and jet fighters - or someone who reminisces fondly over the gasoline-sloshing drag-racing 1960's.



Let such a guy design only the look of the cars (as "product czar" I assume he has more power than just that), since he's clearly much better at that than he is in predicting what Americans will want at $4. Let the "Wired" kid be Bob's sidekick if that keeps his ego intact.

Have a Press Conference announcing said young Wired engineer-geek as Bob Lutz' "go to guy" or "consultant" for all future powertrain and technolgical options (interior gadgets) strategy. Make a bold public statement that GM is about changing the game completely, not simply a reluctant retreat from SUVs, a small car here and there, and an "eggs in one basket" pricey Volt. Try to make GM the trendy Apple company of Automakers. A company that feels young again.

We need someone who appreciates and wants GM to build a small go-cart like funmobile in the spirit of the best Japanese Kei cars and the MINI Coopers of the world. Someone who can make a GM car attractive to own even if gas is $10/gallon.

660cc's, turbocharged:

+ YouTube Video

[FenwickHockey65]

Originally Posted by member1

Thank you RIck and Lutz for this. When will those two idiots go? What will it take? GM market cap is at 6.5 billion now. Thank you rick and lutz for making all of those truck and suvs and ignoring quality and cars for so long. Now you are paying for it.

Originally Posted by member1

He should of know that under rick and lutz there is only chapter 11.

Why did he think that 40k low volume volt will save company. That is stupid. Plus why did he think that gm will bring quality up to honda standards over night. They will not they had 20 years to do that and they still cant do it. Why does he think that there will be no competition for volt? VW in 2010 will have stop start technology standard on golf, jeta will be hybrid and plus there is a jetta plug in like volt and electric car coming from VW. Daimler will have electric mercedes and smart in 2010.

Nissan will have electric car by 2010. Honda will have afordable hybrid by then. Toyota will probably have plug in by then too. GM will have hybrid tahoe that nobody wants and 40k volt that only few can afford. Why did anybody think that volt will save gm?

If GM falls below $10/share, I may buy a couple shares. Companies have weird trends of bouncing back after events like these. It may take some time...but there's a pretty good chance of a nice return.

[K-1]

Originally Posted by Ming

Even "Member1" has a point about the Tahoe Hybrid nobody wants, and a $40,000 Volt not being a panacea for GM's woes.

One car won't save the farm, but it can do wonders for the rest of your products. Ever hear of the Prius?

Originally Posted by Ming

Look at HP's (and by extension pre-merger Compaq's) turnaround under Mark Hurd.

Does anyone think that Mark Hurd would still have a job with HP if HP was seeing the kind of loss in market share and plummeting stock prices that have gone on under Rick and Bob?

Please don't compare running a heavily white-collar IT company to a heavily blue-collar manufacturing company. That's an apples-to-turtles comparison. Any idiot CEO can outsource manufacturing/engineering/support to China/India, buy up marketshare, and cut workers. Hurd is hardly worthy of that praise.

[1931Chevy]

Originally Posted by FenwickHockey65

If GM falls below $10/share, I may buy a couple shares. Companies have weird trends of bouncing back after events like these. It may take some time...but there's a pretty good chance of a nice return.

Becareful my friend because if the stock falls a little more theres to ways here up or to bankruptcy, GM biggest mistake was making hybrids for the big SUVs instead of going straight to the main cars like the impala and malibu, now it might be too late for the company unless Rick is planning to sell half of GM to Tata or Mahindra or a Chinese company, Ricks problem has been that his plan has been moving damn slow and the automotive market is changing day by day and he got caught with his pants down.

[vanshmack]

It may be time for a "coaching change" at GM. I've been Wagoner supporter, but I think he's taken them about as far as is going to. A fresh new vision is needed to continue the turaround.

There have been many on this board blaming Lutz and calling for his head. I completely disagree with that notion, as he (and Ed Welburn) is the reason GM didn't file for BK 4 years ago. The reality is, Lutz is the reason that GM has more than 2 desirable cars, and he needs to be kept around to ensure that desirability improves.

[PontiacBixler]

I love how all the "Maximum Bob"-Haters are coming out now....
Give me a break...
Most of the people calling for Bob's head on a pike now are the ones that, whenever I posted that Lutz was out of touch with the industry, wanted my head on a pike and flamed me pretty bad.

Come on.... NOBODY SAW THIS COMING?????

We've been having juggling and bobbling acts with brands and designs occurring since 2001 and such a focus on SUVs and Trucks for the better part of a decade while gas prices have steadily climbed. Sorry GM, but the "Euro level of Fuel Prices" mentality showed just how out of touch you really are.

$3.50 was the breaking point.
At least Ford recognized that. You guys still haven't.

This is a sad and pathetic day.