"GM Common Stock Will Have No Value" | Hacker News Reader

"GM Common Stock Will Have No Value"

media.gm.com

18 pointssev12 comments

Why is the stock still even listed? I thought stocks that fell below a dollar were automatically de-listed, and that would be especially quick given that company is literally bankrupt.

It is not traded in the same form it was prior to the bankruptcy. It was delisted from the NSYE and its symbol was changed. It is now GMGMQ and is traded over-the-counter (OTC). [1] This is the method that most penny stocks are traded through. This is not a formal stock exchange.

[1] http://www.investopedia.com/terms/o/otc.asp

They trade OTC on Pink Sheets: http://pinksheets.com.

Blog post about GM trading on Pink Sheets http://blogs.wsj.com/marketbeat/2009/06/01/gm-to-trade-on-pi...

Don't many stocks trade below a dollar? So-called penny stocks?

Refreshingly blunt.

I wonder why anyone does trade that stock. Theories welcome.

Greater fool theory?

http://en.wikipedia.org/wiki/Greater_fool_theory

I just recently read an article that discussed this phenomenon. Took me forever to dig it up:

http://www.bloomberg.com/apps/news?pid=20601057&sid=anOM...

in summary, many stocks go up after declaring bankruptcy, and it's probably due to short-covering.

Edit: but then the next question is, why cover your short-sell at all if we know it is going to 0 eventually? It may be that they are trying to release their money tied up in 'margin' http://www.investopedia.com/ask/answers/05/shortmarginrequir...

Supposition they'll get more money from the government in a continuous wave of "assistance for the next x months."

Supposition?

Pretty much a guarantee. Do you really think that Obama and Dem congresscritters will let GM die on their watch?

However, the UAW has gotten its first pound of flesh. The "new GM" is closing their best small car factory, the saturn plant, and will start building small cars in Michigan. It's only a coincidence that said plant is in an area with Republican congress critters.

Note that the workers at saturn are covered by a standard UAW contract....

I saw a sign on a GM dealer a few months ago, "100 shares of stock with a new car purchase". LOL, they can't even give their company away!

What happens to preferred stock?

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