Probably a good trade now.

ML

Avinash:

maybe a short term trade, but definitely not willing to hold even over a weekend.

Look at the balance sheet, its got 58 billion NEGATIVE EQUITY !! almost similar amount of negative retained earnings.pause for a second and think about that !! GM has lost more money in its history than its made....hahah

there are much better values out there to buy and hold long term. if you want to roll the dice or put money in hoping it lands "red"...fine.

crappy management, crappy products, crappy stock !! but then i am not pointing out something new.

 

When a company is in this kind of share I find one ratio very useful. Take cash and marketable securites 20 - 21 billion and divide by the cash burn rate for the quarter. Right now that figure looks to be close to 4 billion a quarter looking at Aug. figures. So they could go four to five quarters without any outside financing. Of course this is a very roughly guestimate because some business retooling, taking plants idle, compensation hits, etc all play into this.

I forgot to add, next year and this year were their starting baby boomer years. GM anf F both got into the saem mess as the us government with a pension and medical plan for retirees. Each GM car last year contained at least 1,500 in expenses related just to retirement benefits. With the smaller unit numbers they are selling that cost per vehicle is probably about 2,000 right now.

BGF

Reports: Chrysler, GM discuss merger, acquisition
Saturday October 11, 7:10 am ET Reports: Chrysler, General Motors discuss merger or acquisition of Chrysler by GM DETROIT (AP) -- General Motors Corp. and Chrysler LLC have held preliminary talks about a merger or an acquisition of Chrysler by GM, according to published reports.

The Wall Street Journal, citing people it described as familiar with the discussions, reported that Cerberus Capital Management, the private equity firm that owns 80.1 percent of Chrysler and 51 percent of GMAC Financial Services, proposed trading Chrysler's automotive operations to GM. The Journal said Cerberus would receive GM's remaining 49 percent stake in GMAC.

Mr. P

I suspect that GM will be around in 10 years.  It may go through bankruptcy first, but it will be around.  There are too many jobs at stake for it to go out of business.  The guarantees that the Govt has promised will have to be granted.  This will allow teh auto industry to retool with smaller cars and alternate energy offerings (as mandated by teh Govt through required higher MPG).  If you and I don't start buying their products, the future doesn't look good.  As almost a lifetime GM driver, I switched when they closed Oldsmobile.  I now drive Lexus and Acura - never to return to GM or domestic.

I don't think dumping GMAC will make much difference.  They have to start making a profit on cars they manufacture here. So far, I can't see that happening.  They seem to be missing the boat on making smaller cars.

GG

What are the odds of GM surviving? Zero.

 There is a small possibility of it being bought out by someone.

Avinash:

Eagle, it is an opportunity to buy.  GM has more money in check book than what the company is trading for.  Also, per words of Toyota Management (American Media Darling) GM is very strong (best in the world) in Financial Controls.  So it is more than 50/50 chance.

Avinash

as another poster mentioned, GM has negative shareholder equity, meaning that all their cash is offset by debt. even if they had actual cash equity I wouldn't trust management to invest it wisely.

drymartini:

Avinash:

maybe a short term trade, but definitely not willing to hold even over a weekend.

Look at the balance sheet, its got 58 billion NEGATIVE EQUITY !! almost similar amount of negative retained earnings.pause for a second and think about that !! GM has lost more money in its history than its made....hahah

there are much better values out there to buy and hold long term. if you want to roll the dice or put money in hoping it lands "red"...fine.

crappy management, crappy products, crappy stock !! but then i am not pointing out something new.

 

Hard to argue with. Of course, I believe the trademarks will survive, question is do they go into bankruptcy. If so, maybe their bonds are a reasonable play, if not, maybe their stock is a reasonable play. 

I want to update my post above because my post could be misconstrued.

I meant that post from a shareholder point of view.

meaning my post to the question " What's the odds of GM surviving?" was from shareholder point of view.

GM could very well go into chapter 11 but its too important an entity to be liquidated. its in US govt. interest to make this entity re emerge from bankruptacy.

but as a shareholder all you care is whether it enters chapter 11. then you are finished. You dont really care whether GM "survives" or not !!

by surviving, i am assuming oringinal poster meant whether it enters chapter 11 or not.