General Motors Is Headed For Bankruptcy -- Again

[Chris]

President Obama is proud of his bailout of General Motors. That’s good, because, if he wins a second term, he is probably going to have to bail GM out again. The company is once again losing market share, and it seems unable to develop products that are truly competitive in the U.S. market.

Right now, the federal government owns 500,000,000 shares of GM, or about 26% of the company. It would need to get about $53.00/share for these to break even on the bailout, but the stock closed at only $20.21/share on Tuesday. This left the government holding $10.1 billion worth of stock, and sitting on an unrealized loss of $16.4 billion.

Right now, the government’s GM stock is worth about 39% less than it was on November 17, 2010, when the company went public at $33.00/share. However, during the intervening time, the Dow Jones Industrial Average has risen by almost 20%, so GM shares have lost 49% of their value relative to the Dow.

It’s doubtful that the Obama administration would attempt to sell off the government’s massive position in GM while the stock price is falling. It would be too embarrassing politically. Accordingly, if GM shares continue to decline, it is likely that Obama would ride the stock down to zero....

General Motors Is Headed For Bankruptcy -- Again (http://www.forbes.com/sites/louiswoodhill/2012/08/15/general-motors-is-headed-for-bankruptcy-again/)

Tell me again why government is involved in investing our tax dollars in picking winners and losers in business?

[MMC]

Yep both Obama and Biden are touting look at GM.....tho Obama's wording has changed to he saved GM. Saved those jobs. Here is some more.

http://static.guim.co.uk/sys-images/Guardian/Pix/audio/video/2012/8/2/1343913382978/General-Motors-008.jpg
America's largest car firm made $1.5bn in the second quarter of 2012, with European division reporting operating loss of $361m.

General Motors (http://www.guardian.co.uk/business/generalmotors)' profits fell 41% in the second quarter as troubles in Europe undercut strong sales in North America.

America's largest automaker made $1.5bn in the second quarter of 2012, compared with $2.5bn for the same period last year. Revenue fell to $37.6bn from $39.4bn in the second quarter of 2011. The results exceeded analysts' estimates, but further underlined Europe's drag on the US economy (http://www.guardian.co.uk/business/useconomy).

In North America, GM reported an operating profit of $1.97bn, which compares to a profit of $2.25bn for the same period a year earlier. The company posted a loss of $19m in South America during the second quarter, and made a profit of $557m in its international division, primarily in China.....snip~

http://www.guardian.co.uk/business/2012/aug/02/gm-profits-slip-european-struggles

[Cigar]

Sorry to pour water on your excitement .... :)


Far be it from me to defend General Motors (http://www.forbes.com/companies/general-motors/), which is a company still in need of serious work, but let’s not toss around such incendiary words as “bankruptcy” without putting a little effort into understanding the situation, OK? GM is a global company with a strong balance sheet, and not in any danger of going bankrupt again. It has $33 billion in cash and $5 billion in debt on its balance sheet; posted $2.5 billion in net income so far this year, and generated $1.7 billion in automotive free cash flow in the second quarter.

http://www.forbes.com/sites/joannmuller/2012/08/16/leadership-not-another-bailout-will-fix-general-motors/

[Chris]

Sorry to pour water on your excitement .... :)


Far be it from me to defend General Motors (http://www.forbes.com/companies/general-motors/), which is a company still in need of serious work, but let’s not toss around such incendiary words as “bankruptcy” without putting a little effort into understanding the situation, OK? GM is a global company with a strong balance sheet, and not in any danger of going bankrupt again. It has $33 billion in cash and $5 billion in debt on its balance sheet; posted $2.5 billion in net income so far this year, and generated $1.7 billion in automotive free cash flow in the second quarter.

http://www.forbes.com/sites/joannmuller/2012/08/16/leadership-not-another-bailout-will-fix-general-motors/


GM is a global company

From your link, the paragraph before yours:
The U.S. Treasury Department’s tally of what the government might lose on its $85 billion auto bailout keeps rising as GM’s stock price sinks. Earlier this week, it put the number at $25 billion, about 15 percent higher than its previous forecast.

And the paragraph after:
That said, anyone who looks at the summary slide GM provided to investors during its second quarter earnings call can see this is not a company headed in the right direction. GM sold more cars, but revenue, profits and cash are down across the globe.

Not in trouble?

[Cigar]

Why are you so Un-American?

[Chris]

Nice trolling distraction to cover up your cherry picking, not biting.

[MMC]

http://www.forbes.com/sites/louiswoodhill/2012/08/15/general-motors-is-headed-for-bankruptcy-again/4/

Well Chris's Link was to Forbes Cigar. :wink:

[Goldie Locks]

If they have so much money sitting in the bank, why don't they buy their shares back from the government?

[Peter1469]

Sorry to pour water on your excitement .... :)


Far be it from me to defend General Motors (http://www.forbes.com/companies/general-motors/), which is a company still in need of serious work, but let’s not toss around such incendiary words as “bankruptcy” without putting a little effort into understanding the situation, OK? GM is a global company with a strong balance sheet, and not in any danger of going bankrupt again. It has $33 billion in cash and $5 billion in debt on its balance sheet; posted $2.5 billion in net income so far this year, and generated $1.7 billion in automotive free cash flow in the second quarter.

http://www.forbes.com/sites/joannmuller/2012/08/16/leadership-not-another-bailout-will-fix-general-motors/

But its long term prospects are bleak. It just trotted out its redesigned Malibu and this model will have to carry them for 5 years. It is coming in 3rd or 4th place compared to its competition..., not a good place to be.

[wingrider]

so should I sell my caddy and buy a benz