General Motors Corp (NASDAQOTH:GMGMQ.DL)

blade5adj (21.63) Submitted: 8/13/2008 3:15:50 PM : Start Price: $10.36 GMGMQ.DL Score: -3.57

I think the moody´s downgrade, putting the debt below investment grade, will be a serious problem for the company. Although this company isn´t as highly leveraged as Enron was, when you look back, it was their debt getting downgraded below investment grade that put the gears in motion to bring them down.GM is down almost 67% today from their 52 week high, and I´m guessing they´ve got a way to go. They don´t really offer anything to a potential acquirer other than size and a horrible pension program, so unless they fall quite a bit more I don´t see an acquisition happening. That is one of the risks to my underperform, since an acquirer could seriously impact their stock price. Since they´re so big and the only thing I could potentially see would be a merger (which Ford would be so dumb if they did), I´m going to say the risks for that are pretty remote.Overall, the debt they issue from now on is going to cost them big time, and with credit markets the way they are, that´s going to be a big deal. I also think that crude and commodities are in a temporary downswing, and if oil prices and gas prices pick back up again, a backwards company like GM is screwed.