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GM tells investors: Don't buy our stock
- Thread starter Area52
- Start date
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Follow up. This should be on "believe or not".
Published: Friday, 10 Jul 2009 | 1:22 PM ET Text Size By: David Faber
CNBC Anchor and Reporter
Iâve noticed today that shares of GM [GMGMQ 1.15 0.313 (+37.4%) ], which have absolutely no value, are trading up 39% to well over $1 a share.
The stock no longer trades on the NYSE, but still trades over the counter.
It is typical to see shares of a bankrupt company continue to trade for some value, despite the highly likely outcome that those shares will have no value.
But, this is truly bizarre because GM has emerged from bankruptcy. These shares should not even exist any longer let alone trade for any value.
It seems likely that some unsophisticated investors, reading the headlines about GMâs emergence from bankruptcy, are buying its stock. The problem is that the old stock has no claim on the ânewâ GM and no value. Itâs also possible that some investors, knowing that other investors would pile in today, were buying shares with the knowledge they can sell them to the clueless people who think theyâre getting in on the ânewâ GM.
It may be a while until we see shares of the new GM.
The companyâs CFO told our Phil Lebeau that an IPO could come at the earliest in the second quarter of next year.
We will see when issued market in those shares emerge well before an IPO, but that is also some time from now
Published: Friday, 10 Jul 2009 | 1:22 PM ET Text Size By: David Faber
CNBC Anchor and Reporter
Iâve noticed today that shares of GM [GMGMQ 1.15 0.313 (+37.4%) ], which have absolutely no value, are trading up 39% to well over $1 a share.
The stock no longer trades on the NYSE, but still trades over the counter.
It is typical to see shares of a bankrupt company continue to trade for some value, despite the highly likely outcome that those shares will have no value.
But, this is truly bizarre because GM has emerged from bankruptcy. These shares should not even exist any longer let alone trade for any value.
It seems likely that some unsophisticated investors, reading the headlines about GMâs emergence from bankruptcy, are buying its stock. The problem is that the old stock has no claim on the ânewâ GM and no value. Itâs also possible that some investors, knowing that other investors would pile in today, were buying shares with the knowledge they can sell them to the clueless people who think theyâre getting in on the ânewâ GM.
It may be a while until we see shares of the new GM.
The companyâs CFO told our Phil Lebeau that an IPO could come at the earliest in the second quarter of next year.
We will see when issued market in those shares emerge well before an IPO, but that is also some time from now
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