GM stock at lowest level since 1950

[AutoEuphoria]

DETROIT (Reuters) - General Motors Corp (NYSE:GM - News) shares fell as much as 21.6 percent to their lowest level since 1950 on Thursday amid financial market turmoil and the car maker's report of European sales declines through the first nine months of 2008.

GM, whose shares fell as low as $5.42 on the New York Stock Exchange, blamed the credit crisis and inflation for hurting consumer confidence in Europe, where its sales have declined 1.9 percent in 2008 through September.

GM, the largest U.S.-based automaker, posted a $15.5 billion net loss in the second quarter and announced plans in July to cut costs by about $10 billion. The company has been restructuring in North America to meet increasing demand for more fuel-efficient vehicles.

An investment banker who declined to be identified attributed the share decline to elimination of short-selling restrictions on the shares that had put the equity value out of balance with bond and credit-default swaps values.

"It all has to rebalance now," the banker said.

The stock decline comes as influential industry forecasters J.D. Power and Associates and Global Insight lower auto sector expectations for 2008 and predict a slow recovery.

"While the global automotive industry is clearly experiencing a slowdown in 2008, the global market in 2009 may experience an outright collapse," said Jeff Schuster, J.D. Power's executive director of automotive forecasting, in a statement.

J.D. Power cut its 2008 U.S. light vehicle sales forecast to 13.6 million units and said it expects sales to fall to 13.2 million units in 2009. Global Insight on Wednesday cut its 2008 U.S. auto sales outlook and warned that a recovery toward more normal levels may not occur until 2013.

Citigroup also cut GM and Ford Motor Co (NYSE:F - News) to "sell" ratings on Wednesday.

Ford shares fell 20 cents, or 7.5 percent, to $2.46 on Thursday. Ford stock had reached its lowest level in a quarter century on Wednesday, falling as low as $2.10.

GM shares were off $1.01, or 14.6 percent, at $5.90.

http://biz.yahoo.com/rb/081009/business_us_gm_shares.html

 

[ReiKo]

Strap yourself in boys and girls... We about to go on one huge rollercoaster ride...

 

[AutoEuphoria]

Dow Jones is now at -678.91 for the day and still trading. It dropped below 9k for the first time in 5 years and currently sits at 8,579.19

 

[CableGuy]

Look at the market! 8500!!!

 

[jsxtreme]

It's one big shit sandwhich, and we're all gonna have to take a bite. :crap:

 

[AutoEuphoria]

Quick! Government! Give us $900 billion dollars so we can buy stocks!

 

[DBK]

Honestly, this sucks on paper, but it is NOT the end of the world. This minute by minute updating means nothing unless you're a day trader or were planning on retiring on Friday.

 

[robvas]

Circuit City's stock is at 40 fucking cents.

 

[COOKIE MONSTER]

We'll come back in time...

 

[deviate]

im young and uneducated on the stock market but with the bailout coming in, if one was to purchase stocks today, wouldnt it be a automatic guarantee to go up once the bailout is in effect?

 

[AutoEuphoria]

Agreed, but it was down 7% on the day. Hope it'll straighten out soon. It just makes us look weak, and lowers confidence around the country and around the globe.

if one was to purchase stocks today, wouldnt it be a automatic guarantee to go up once the bailout is in effect?

Not necessarily. Not all stocks are going down, and not all stocks are going to go up.

 

[deviate]

ford, at 2.xx a share, as well as gm being so low, and the retirement funds taking a direct hit, wouldnt that mean that those are going to be the main focus of the funds aquired from the bailout.

wouldnt that directly effect the shareholders, in a almost 100% guarantee of a rise?

 

[AutoEuphoria]

Bailout is not for the market...it's buying debt from banks. People walked out on loans they couldn't afford, then banks were out a crapload of money. They "couldn't afford" to give out any more loans, so they froze credit to everyone, including businesses. Businesses run on credit, so congress did this:

and signed over $700 billion of our money to buy the bad debt...oh yeah, and some extra money for wooden arrows and bikes and race tracks and things to help them get re-elected.

 

[DBK]

I can't believe GM is $4.76. I truly never thought I'd see the day. Their market cap is $2.7 billion. There are now several hundred people who could buy GM cash.

 

[deviate]

i thought it was money that was a direct boost of the market...

like i said im uneducated on the situation.


so as soon as this shit goes through, loans should be easier to get them they have been. I heard through passing, some people complaining that more borderline mortgages and high risk loans are going to take place because of this.

 

[WhiteHawk]

The scary thing is, that as low as it is, I am still scared to buy it because it will probably drop further.

-Geoff

 

[deviate]

but even at the price its at now, even if drops lower, it will have to eventually have to go up.

 

[churd609]

but even at the price its at now, even if drops lower, it will have to eventually have to go up.

not true. Like mentioned above, most big business operate on credit. They are issues a sort of credit worthiness. Let's say you buy circuit city at 40 cents and in 3 months they have to try and refinance their bank loans, but are unable to do so because they are not deemed credit worthy enough. They filed bankruptcy and close up shop, or they are bought out. If they get bought out though, it would must likely be just their inventory, but who knows if another company is willing to take a risk. At least this is my understanding of it. Like you, i am not a brain trust on the issue, but am skeptical about buying any new stock at this time.

 

[cdn_lx]

GM will be at 0.00 by 2010. They cannot survive with their legacy costs and the fact young people (most) don't want to drive their cars. I would hate to see this cause I am a GM die hard. Who will buy a car with a powertrain warranty when the company is close to bankruptcy? I am stockbroker in Canada, and today we tried to sell off some of our client's GMAC bonds that mature in 2009. The clients just wanted out at any cost. Unfortunately, there was no bid price. That means not even one person would offer to buy them from us. Scary.

 

[mdhmi]

we tried to sell off some of our client's GMAC bonds that mature in 2009. The clients just wanted out at any cost. Unfortunately, there was no bid price. That means not even one person would offer to buy them from us. Scary.

Hard to blame them, I certainly wouldn't want to be left holding the bag on a bunch of worthless SUV's.. 50% on the dollar would probably still be over valued.