GM Stock Up 4% In PMT On Activist Move

1722 Views 12 Replies 11 Participants Last post by mchicha, Feb 12, 2015

Perian

Discussion Starter · Feb 10, 2015

StreetInsider

February 10, 2015

Article Quotes:

Pre-Market : 37.33 Up 1.33 (3.69%) 9:06AM EST

General Motors announced that it has received notice from Harry J. Wilson regarding the intent to nominate himself as candidate to stand for election to the GM Board of Directors at the company’s 2015 annual meeting of stockholders and bring before the annual meeting a proposal that the company commit to completing $8 billion of share repurchases on or before the first anniversary of the 2015 annual meeting.

Mr. Wilson’s notice indicated that he is acting with and on behalf of himself and four investment funds that support his election and proposal: the Taconic Parties, Appaloosa Parties, HG Vora Parties and the Hayman Parties, which together own approximately 34.4 million shares, or approximately 2.1 percent, of the company’s common stock. Mr. Wilson’s notice further indicates a fee arrangement under which he will receive a percentage of the group’s profits from their investment in GM.

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Perian

Discussion Starter · #2 · Feb 10, 2015

We asked - nine months ago - if it was time to buy GM stock...

http://www.gminsidenews.com/forums/f12/stock-x-ray-general-motors-now-time-buy-gm-stock-167193/

...and now we have the answer: The stock has not really moved in this time period.

So we ask again...is now the time to buy GM stock? Note that the stock is up 14.4% over the past two weeks.

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dslay04

· #3 · Feb 10, 2015

I don't know if I see him betting on. GM tends to shy away from activist investors. Activists investors are the type that want GM to do what ever it takes to have large dividends despite what it may mean for the brand and the overall company. Examples would be:
- Shutdown Cadillac
- Shutdown Opel
- Burn money on stock buybacks instead of reinvesting in product or R&D.

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Ed753

· #4 · Feb 10, 2015

Something smells like fish................

http://www.detroitnews.com/story/business/autos/general-motors/2015/02/10/harry-wilson-gm/23163741/

A former Obama administration auto adviser wants to join General Motors’ board and is urging the Detroit automaker to repurchase $8 billion in stock by 2016.

Harry J. Wilson, who was a senior member of the Obama administration auto task force that pushed GM into bankruptcy in 2009 as part of a $49.5 billion bailout, said he plans to seek election by shareholders to the board at the company’s 2015 annual meeting “and bring before the annual meeting a proposal that the company commit to completing $8 billion of share repurchases on or before the first anniversary of the 2015 annual meeting.”

GM said Wilson is working with four investment funds that support his election and proposal: the Taconic Parties, Appaloosa Parties, HG Vora Parties and the Hayman Capital hedge fund founded by Kyle Bass, which together own approximately 34.4 million shares, or approximately 2.1 percent, of GM. Wilson has “a fee arrangement under which he will receive a percentage of the group’s profits from their investment in GM.”

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wescoent

· #5 · Feb 10, 2015

$8B in share repurchases? Can anyone here think of a better use of those funds?

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DealerGuyAtl

· #6 · Feb 10, 2015

I don't see this going anywhere. With only 2.1% of the outstanding shares, they don't have the clout to get a new Board Member or force GM to do anything. I am sure Warren Buffet and other big shareholders wouldn't buy into this pump and dump scheme. My 12k shares would definitely vote NO.

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vxl

· #7 · Feb 10, 2015

DealerGuyAtl said:
I don't see this going anywhere. With only 2.1% of the outstanding shares, they don't have the clout to get a new Board Member or force GM to do anything. I am sure Warren Buffet and other big shareholders wouldn't buy into this pump and dump scheme. My 12k shares would definitely vote NO.

I don't see why they can't get a board member. Nelson Peltz has just over 1% of PEP but finally has his man in the boardroom. Greed rules. After all, what's $8bn when there is much, much more on the balance sheet to be harvested. GM management must resist any large share buy-back - didn't Roger Smith not spend billions in the 80s doing the same thing when product investment might have been more prudent?

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DealerGuyAtl

· #8 · Feb 10, 2015

vxl said:
I don't see why they can't get a board member. Nelson Peltz has just over 1% of PEP but finally has his man in the boardroom. Greed rules. After all, what's $8bn when there is much, much more on the balance sheet to be harvested. GM management must resist any large share buy-back - didn't Roger Smith not spend billions in the 80s doing the same thing when product investment might have been more prudent?

Because GM is not nominating nor endorsing Wilson. The majority of the shareholders will vote their shares as GM recommends.

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rsbaker

· #9 · Feb 11, 2015 (Edited)

Every GM shareholder should VOTE NO on the Wilson board membership. Mr. Wilson and his Hedge Fund associates are attempting to get on the GM board in order to force the company to buy back company stock. The scheme if successful will result in a spike in GM Stock price price so Wilson and Friends can then sell their stock at a profit while at the same time forcing GM to also increase its current stock dividend payment per share. The result of this is that it will force GM to burn through about $8 Billion in Cash reserves according to news reports. GM has a large cash reserve that it will need to invest in R&D and new vehicles and to weather the next inevitable Economic down turn or recession. But Wilson and friends are greedy and reckless and if successful they will walk away with $8 Billion profit. They will not have created a single new Job nor made a single new car nor expanded GM's business not one bit, yet GM in the end will be left much weaker. I hate Hedge Funds and I think they are like leaches on the Economy. I wish they could be outlawed?

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johnny smallblock

· #10 · Feb 11, 2015

rsbaker said:
But Wilson and friends are greedy and reckless and if successful they will walk away with $8 Billion profit.

They will walk away with a profit, but not an $8b profit. They paid for their shares, so their profit will only be the amount they can push up GM stock for long enough for them to sell.

rsbaker said:
They will not have created a single new Job nor made a single new car nor expanded GM's business not one bit, yet GM in the end will be left much weaker. I hate Hedge Funds and I think they are like leaches on the Economy. I wish they could be outlawed?

Yet it is true that GM will be $8 weaker for it. This is a terrible idea and is shameful that people would use their money/power to harm a company that supports millions of people.

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Extreme4x4

· #11 · Feb 12, 2015

And no one could see that this type of move was inevitable??

Wow

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AMERICA 123

· #12 · Feb 12, 2015 (Edited)

johnny smallblock said:
They will walk away with a profit, but not an $8b profit. They paid for their shares, so their profit will only be the amount they can push up GM stock for long enough for them to sell.

Yet it is true that GM will be $8 weaker for it. This is a terrible idea and is shameful that people would use their money/power to harm a company that supports millions of people.

Possibly / probably got a big fat option play in mind and @ least partially set up........and another smaller or is it larger ? one in the back pocket already for when the effects of all this yo - yo down - when it fails et al.

Which one would think they know already is going to happen.

I've seen 2.1 / 2.5 % referenced - in either case it will very likely go the way you posted.

Notice and then also notice the details + the specificity of the completion date.

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mchicha

· #13 · Feb 12, 2015 (Edited)

This is the sort of corruption that makes people notice that they no longer control their government. The Fact that he was on a public policy board formulating policy on the auto industry totally disqualifies him from this sort of activism.

If there is a single dissent administrator at the SEC, they would put an end to this pronto. But the SEC just as the FDA are corrupt to the core.

He probably drives a Toyota.

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