GM's Shares Are Cheap!
Exactly one month ago, General Motors filed for bankruptcy court. My colleague Joe Magyer wrote about the affair on Fool.com (read more here) and did not exactly mince words about the future value of GM common stock:
And what of GM's shares? I want to be crystal-clear about what GM's shares will be worth in very short order: Zero. Zilch. Nada. Zip. $0.00. Common shareholders are dead last on the totem pole of bankruptcy prioritization, which usually means they get nothing in a reorganization. If bankruptcy investing is new to you, I highly recommend this classic by fellow Fool Bill Mann: "When Companies Go Bankrupt."
Well, today, GM executives are saying the same thing. Check out this story from the AP. A few highlights:
GM said it has noticed continuing high trading volume in GM's common stock at prices in excess of $1.
"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," the automaker said in a statement.
And this (which should have been the lede, methinks):
In over-the-counter trading Wednesday afternoon, GM shares were at around 96 cents.
If you have any thoughts about GM stock these days ... well, give Joe Magyer a close read.
-- Brian Richards (Disclosure: No stake in GM. But you probably suspected that.)