GM's Market Value Drops Below that of Toy Car Maker Mattel

[Ming]

Mattel Eclipses GM in Value on Toy-Car Gains
By Jeff Green and Heather Burke



July 4 (Bloomberg) -- Mattel Inc., helped by rising sales of Matchbox and Hot Wheels toy cars, has a larger market value than General Motors Corp. for the first time as record U.S. gasoline prices crimp sales of real cars and trucks.

GM shares fell to the lowest since 1954 this week after an analyst said bankruptcy was ``not impossible'' if the auto market continues to deteriorate. GM's U.S. unit sales fell 18 percent in June. The chart of the day shows a comparison of the change in market value for Mattel and GM.

Mattel is surpassing GM even after the toymaker reported its first quarterly loss in almost three years in April, a reflection of the diverging outlook for the two companies. Mattel may return to profitability after the first quarter, while GM will probably report losses through 2009 as buyers spurn pickup trucks and sport-utility vehicles, analysts said.

``Hot Wheels and Matchbox are basic, low-priced toys, so they appeal to consumers, in the U.S. and especially in less affluent countries, who may not be able to afford more expensive toys,'' Sean McGowan, a toy analyst at Needham & Co. in New York, said yesterday in an e-mail. He recommends buying Mattel shares.

GM, the world's largest automaker, rose 14 cents, or 1.4 percent, to $10.12 in New York Stock Exchange composite trading yesterday after a JP Morgan & Chase Co. analyst said GM has ``tough but manageable'' liquidity options. Mattel rose 8 cents to $17.22.

Mattel briefly passed Detroit-based GM in market value for the first time June 26 and regained its lead July 2. El Segundo, California-based Mattel is the world's biggest toymaker.

Source: http://www.bloomberg.com/apps/news?p...Jled0&refer=us

The company's current market value is smaller than that of Mattel, maker of Matchbox cars, and a tenth of what it was in 2000.

http://business.smh.com.au/gm-consid...0704-31fs.html

What's even more humiliating for GM is the number of companies – and the types of companies – that have passed it in terms of their market capitalizations. With a tip to the Wall Street Journal's Market Beat blog, which compiled a list of its own, GM's market cap has now been passed by Mattel Inc., the toy maker, Harley-Davidson Inc., the motorcycle company, and Magna International Inc., the Canadian auto parts company.

http://www.theglobeandmail.com/servl...tory/WBmarkets

Hot Wheels hit the road for 40th anniversary
July 3rd, 2008

EL SEGUNDO, Calif. — Hot Wheels cars are hitting the road for the brand's 40th anniversary.

A free event featuring life-size versions of the beloved toy cars will be held at locations around the country after a kickoff for employees at Mattel headquarters in El Segundo, Calif.

The road show will include the display of a one-of-a-kind diamond-encrusted Hot Wheels car created in honour of the anniversary and the production of the 4 billionth car. The event will also include historic Hot Wheels memorabilia, autograph sessions with Hot Wheels designers, and other offerings.

The road trip stops Aug. 21 during Speed Week at Utah's Bonneville Salt Flats. On Aug. 24, the travelling show hits the small town of Speed, Kan., and on Aug. 30, look for the life-size version of the toy cars at the Indianapolis Motor Speedway.

On Sept. 1, the Hot Wheels event comes to Detroit's Automotive Hall of Fame, and on Sept. 5, the road trip finale takes place at the Watkins Glen Grand Prix Festival in New York's Finger Lakes region.

For more information on Hot Wheels and 40th anniversary activities, cruise over to: http://www.hotwheels.com/40th

http://canadianpress.google.com/arti...fWk3YLse2fPeyA

[drew770]

Why does Rick Wagoner and Co still have their jobs? And on a side note, you would think the Camaro was already out on dealer lots with all the pictures and the free press this car is getting.

Boy, by the time the Camaro debuts it will be boring.

[suckstobeyou]

Originally Posted by drew770

Why does Rick Wagoner and Co still have their jobs? And on a side note, you would think the Camaro was already out on dealer lots with all the pictures and the free press this car is getting.

Boy, by the time the Camaro debuts it will be boring.

He has no control over the prices of stocks. It is the people speculating. The same reason our gas prices are up the ass. It is a few people somewhere tweaking out cause something is happening and calling doomsday to come.
Or like someone else called it: legal inside trading

[mjd1001]

I wonder what the value of all the assets GM holds is? If you took the value of all their buildings and plants, all the parts they already own...all the cars they own...and everything else...and added up the entire value of their liquidation price, then subracted their debts.......how would that compare to the companies market cap?

I know it doesn't mean a whole lot, just would be interested to find that out.

[RedVee8]

Maybe Suzuki will buy a controlling interest....

[Ming]

Just a question to toy car collectors - what's the difference between Hot Wheels and Matchbox cars anyway? Is it thematic (concept cars vs. production cars) or size, or something else?

[CobaltSScrazy]

Can someone elaborate on market capitalization and why its important? Sorry, I'm in healthcare not business and want a 'educated, easy, but decently comprehensive' understanding of it that I don't need to spend an hour at the library reading about.

thanks

CobaltSS

[jkennedy293]

A market cap for a company doesn't really mean a whole lot to suits running a company. AOL had a much larger market cap than Time Warner when they merged. How did that work out?

If the dot com bubble proved anything, it's that the market cap of a company can be manipulated to be different than the company is actually worth. How many companies did we see have huge market caps only to go out of business 2 weeks later.

The bottom line is that corporate executives don't make decisions just so the company stock will go up. They make decisions that affect the bottom line.

[jkennedy293]

Originally Posted by Ming

Just a question to toy car collectors - what's the difference between Hot Wheels and Matchbox cars anyway? Is it thematic (concept cars vs. production cars) or size, or something else?

I have noticed that Hot Wheels cars are a little more visually exciting. Hot Wheels also has more non-traditional fantasy vehicles.

[BGH]

Market Cap is the total value of all the companies shares. And current share prices are determined by future expectations of the company.

[paul8488]

Magna should buy them. I like the idea of a Canadian car company.

[cincygoblue]

Originally Posted by CobaltSScrazy

Can someone elaborate on market capitalization and why its important? Sorry, I'm in healthcare not business and want a 'educated, easy, but decently comprehensive' understanding of it that I don't need to spend an hour at the library reading about.

thanks

CobaltSS

Market Cap is basically the total value of the company. It's the Share Price x Number of Outstanding Shares. In an efficient market, that # should also equal the value of assets, debts, etc. + future earnings + some risk factors. So if a company were on the verge of bankruptcy, the total Market Cap could be less than the actual value because there might be a lack of future earnings, or the stock could be worthless. In this case, methinks a few investment companies are manipulating the stock price downward so they can buy back-in around the start of next year, when the economy picks back up, Malibu production picks up, the new Cobalt/etc come out, the Volt is on the verge, sales in China continue to rise, healthcare and houly labor costs start to come down dramatically, etc.

The problem for GM is that since the Market Cap is the Share Price x Number of Outstanding Shares, that's about the amount it would take to buy all of GM shares and take full ownership. And actually, someone would only need a large portion to take control. Someone could buy GM and sell it for parts. Sell the plants, sell some brands, sell some technologies (like hybrid and electric and hydrogen), take the cash and kill the rest of the company off. Outside of GM, and its employees and its retirees, think what that would do to the US economy! But I'd suppose if some Chinese company wanted to do that, the only thing stopping it would be the US government, and we know how quick to act they are .

Market Cap is a reflection of the value of the company, but as mentioned above doesn't really impact day to day operations (unless GM wanted to issue new shares, and then the shares have less value and they could therefore raise less cash). However, having the biggest "manufacturing company" in the US go the way it's been headed is bad for all of America, but a lot of people in the media and on Wall Street are actually rooting for it to continue. Not sure what America will do when there are no manufacturing jobs left, and we're reliant on China and India for everything except . . . well, what can't they do? They can make virtually everything we can, they can run our banks, they can even read x-rays via the internet, all cheaper than we can do here. People have been lulled into thinking none of this is a big deal. 10 years from now, we'll all be working for the People's Republic of China.

[mjd1001]

Originally Posted by CobaltSScrazy

Can someone elaborate on market capitalization and why its important? Sorry, I'm in healthcare not business and want a 'educated, easy, but decently comprehensive' understanding of it that I don't need to spend an hour at the library reading about.

thanks

CobaltSS

Basically, it is what a company is worth. Total shares of a publicly traded company times the price of each share. In other words, If every single share of a company were to sell at the current stock price, what is the total value.

[Hunid Racks]

Okay who knows.

Is the value of GM stock higher or lower than the amount of cash that GM reportedly has on hand?

BTW, my opinion is that GM and their stock value isn't so much about the corporation as it is about the business climate in the United States.

Only in America is being American considered a bad thing.

[2002 Caddy]

Originally Posted by jkennedy293

A market cap for a company doesn't really mean a whole lot to suits running a company. AOL had a much larger market cap than Time Warner when they merged. How did that work out?

The bottom line is that corporate executives don't make decisions just so the company stock will go up. They make decisions that affect the bottom line.

Not exactly... The NUMBER ONE job requirement of any CEO is to MAXIMIZE SHARE HOLDER VALUE. This is MBA 101.

You can bet your left one that Rick, Lutz et al. Are ALL watching the market cap VERY closely... Keep in mind they ALL hold thousands, if not MILLIONS, of shares... The $50,000 that I lost in the past year is a drop in the bucket compared to the Millions that Rick has lost.

At least some of us can take comfort in that fact.

The real bottom line is that corporate executives make decisions that affect the bottom line with the GOAL of having the stock go up.

You and several other forum members keep forgetting that the CEO works for the share holders... WE are his boss.