Headline in today's The Detroit News:
GM stock falls below $10
Company leads Dow Index into bear market;' Bankruptcy is not impossible,' analyst says
Not a good sign when the B-word" is mentioned for any company, but especially so when it's mentioned with the nation's largest automaker. That's what Merrill Lynch did, as GM shares dropped to their lowest in more than 50 years. Other Wall Street analysts are concerned that GM might run short of cash.
"The Merrill Lynch analyst was one of the last tepid bulls on GM," said David Sowerby, senior portfolio manger at Loomis, Sayles & Co. LP investment management in Bloomfield Hills. "He was the last guy defending the bunker."
Full story here and here.
jeffweimer says:
08:45 AM, 07/ 3/08
This might be a good time to BUY. Their sales loss was less than all the other top-tier manufacturers (except for Honda, of course - who GAINED), and their product mix is the best of all three US manufacturers, despite having (probably) too many divisions selling the same product. So, their fundamentals (product) are sound and their betting discounted due to $4.00 gas. Two things will happen: we'll get used to it, or gas prices will drop. Wither way, GM is in the best position to capitalize medium to long-term on those two realities. Ford and Chrysler just don't have the resources and capability at this time to weather this storm and gain share and sales. Especially Chrysler. Now, GM is still too reliant on full-size trucks and SUVs - that's what caused this run. Bit they've put an appropriate amount of attention to cars in recent years and their mid-size Malibu (and clones) are arguably equal to the best from any other manufacturer, this shows they've at least looked a bit ahead into the future and are only a little bit behind the 8-ball this time - nothing like the 70's. They had to rely on their overwhelming market share back then to keep going, and then they didn't even really get it. They just seem more flexible and able to move with the market than 30 years ago. They have the Volt in the pipeline and will leverage that into the rest of their product line. They're not going away, and will be able to gain share and volume in the future, this is an opportunity for those with the stones.
brn says:
10:46 AM, 07/ 3/08
Oh look, the price has been above $10 all day long.
Why is $10 the magical sky-is-falling number?
ateixeira says:
12:33 PM, 07/ 3/08
I may buy a few just as a gamble.
Ford's even cheaper.
stovt001 says:
11:14 PM, 07/ 6/08
Their cash is sufficient to last through 09. 2009-2010 is when GM will release most of its new fuel efficient models, which should help sales tremendously if the Malibu is any indication. A sale of Hummer (likely) and any other brand (wishful thinking) will help further. GM stock is a great value buy, in my opinion. It may drop a bit further and the advice to never try to catch a falling knife may be well advised, so waiting a little bit might not hurt.