"Old GM" Stock Still Being Traded - Has No Value

[adplusone]

GM cautions investors on stock

The Detroit News

General Motors Corp., which is reorganizing under bankruptcy protection, issued a cautionary statement Wednesday about its shares.

"GM management has noticed the continuing high trading volume in GM's common stock at prices in excess of $1," the automaker said in a statement. "GM management continues to remind investors of its strong belief that there will be no value for the common stockholders in the bankruptcy liquidation process, even under the most optimistic of scenarios."

GM said stockholders of a company in a Chapter 11 bankruptcy "generally receive value only if all claims of the company's secured and unsecured creditors are fully satisfied. In this case, GM management strongly believes all such claims will not be fully satisfied, leading to its conclusion that GM common stock will have no value."

http://www.detroitnews.com/article/2...stors+on+stock

['Vette Dude]

This is stock brokers taking advantage of unsuspecting customers.

[steinravnik]

Quick, buy now, it will rebound tomorrow!

[Perian]

GM Common Stock Still Trading: NY Times Explains Possible Reason
Link: http://www.nytimes.com/2009/06/28/yo...20stock&st=cse

Why Investors Bet on Bankrupt Companies

By MARK HULBERT - The New York Times - Published: June 27, 2009

SINCE General Motors declared bankruptcy early this month, its common stock has traded for as much as $1.59 a share; it closed on Friday at $1.16. Those aren’t great prices, unless you consider that the company has warned investors that “even under the most optimistic of scenarios,” those shares are likely to be worthless.

Why would anyone buy shares of a bankrupt company? It would be easy to conclude that investors are simply being irrational — and, undoubtedly, some of them are. But several studies of past bankruptcies raise the possibility that the market is being less irrational than it looks.

Every company, of course, has a predetermined pecking order — known technically as “absolute priority” — that specifies which creditors will be paid before others in a bankruptcy proceeding. Senior creditors, like banks, are typically at the top of the list; bondholders are lower on the ranking, and holders of preferred stock lower still. Owners of common stock are at the very bottom; they are to be paid only after everyone ranked higher has been paid first.

That’s the theory. And, presumably, if it were followed in the case of G.M., shareholders would almost certainly get nothing. G.M. bonds, which are higher in absolute priority than the common stock, have been trading for around 10 cents on the dollar. If holders of such bonds aren’t betting that they will be made whole, what makes owners of G.M.’s stock think they’ll get anything?

One possible answer is that bankruptcy courts don’t always follow the absolute priority ranking, according to Adam V. Reed, a finance professor at the University of North Carolina at Chapel Hill. In fact, Professor Reed said in an interview, some studies have found that such departures were common in the past. So he concludes that it’s not out of the question that holders of G.M. common stock will receive some consideration from the bankruptcy court.

Article continues at link.

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Current GM stock quote here: http://finance.yahoo.com/q?s=GMGMQ.PK

[Perian]

Originally Posted by Buick61

Ah, remember the time last year when you snarkily answered my question regarding why you don't respond to posts in threads you start by saying, "I'm sorry, I was busy buying GM stock?"

Comeuppance.

I have been buying and selling GM, Ford and Airtran common stock for years. It's been quite a ride. Some trades are positive, and some cut my capital gains taxes...but the day-spreads on these three stocks are usually very attractive.

[sf59er]

Hot potato!

[tbirderic]

I'm out of toilet paper. Does anyone have some old GM stock certificates?

[rlchv70]

Links don't work.

[Drive_Fast]

i still trade amc shares.... from american motors

[tkrelston]

Originally Posted by tbirderic

I'm out of toilet paper. Does anyone have some old GM stock certificates?

use your Hyundai owner's manual!