General Motors (GM) 01 (Jun 08 - Jul 10 )

[helios]

i am logging in my thoughts here ...

since that 27th day, we'd seen 0.15B huge volume [buyers] traded for GM; somehow, somewhat, the sellers were not panicking to sell it over these few days, ie. GM is still trading at a tight narrow range of 1.7 - 1.85 avg. despite the bad reports, news forecast [and probability] of GM filing bankruptcy, obama's disclosure, etc ...

[ucypmas]

Came across this... but this is just a filing detailing their plan at this stage so I suppose their stock price will still stay intact until they formally declare?

http://www.reuters.com/article/business ... sinessNews

GM details plans to wipe out current shareholders
Tue May 5, 2009 8:01pm EDT

DETROIT (Reuters) - General Motors Corp on Tuesday detailed plans to all but wipe out the holdings of remaining shareholders by issuing up to 60 billion new shares in a bid to pay off debt to the U.S. government, bondholders and the United Auto Workers union.

The unusual plan, which was detailed in a filing with U.S. securities regulators, would only need the approval of the U.S. Treasury to proceed since the U.S. government would be the majority shareholder of a new GM, the company said.

The flood of new stock issuance that could be unleashed has been widely expected by analysts who have long warned that GM's shares could be worthless whether the company restructures out of court or in bankruptcy.

The debt-for-equity exchanges detailed in the filing with the Securities and Exchange Commission would leave GM's stock investors with just 1 percent of the equity in a restructured automaker, ending a long run when the Dow component was seen as a bellwether for the strength of the broader U.S. economy.

GM shares closed on Tuesday at $1.85 on the New York Stock Exchange. The stock would be worth just over 1 cent if the first phase of GM's restructuring moves forward as described.

Once GM has issued new shares to pay off its debt to the U.S. government, bondholders and its major union, it said it would then undertake a 1-for-100 reverse stock split.

Such a move would take the nominal value of the stock back to near where it had been before the flood of new shares. But in the process, GM's existing shareholders would see their stake in the 100-year-old automaker all but wiped out.

The automaker said it expected to draw another $2.6 billion from the U.S. Treasury before a June 1 deadline set by the Obama administration for it to reach agreements with all of its key stakeholders.

That borrowing would take GM's debt to the U.S. government to $18 billion, and the automaker said it expected to have to borrow a total of nearly $27 billion.

GM has asked its three major creditor groups to write off at least $43 billion in debt in exchange for ownership of a restructured company.

By contrast, the current market value of GM's current 610 million shares is about $1.7 billion.

The stock has lost about 43 percent of its value since the start of the year.

GM bondholders, who are owed $27 billion, have also been offered new stock in exchange for writing off debt in a bond exchange the automaker launched last week.

The automaker is targeting a debt-reduction of at least $24 billion of its bond debt under the plan and has warned that it could be forced into bankruptcy if that cannot be achieved.

Representatives of GM bondholders, who would be given a 10-percent stake in the new company under the automaker's restructuring, have said they are being offered an unfairly low payout. They have asked instead for a majority stake in the restructured company.

But GM has asked the U.S. autos task force to accept a majority stake in a new GM in exchange for at least half of the government debt that the automaker has run up over the past four months.

Chief Executive Fritz Henderson said on Tuesday that the U.S. Treasury, which oversees the task force, was continuing to evaluate the company's restructuring plan and its progress.

"The Treasury will continue their evaluation through the month, which is fine. But we're not waiting, we're implementing. The bond exchange needed to be launched when we launched it," Henderson said. "Now we'll have to see."

In its filing, GM said it was in "ongoing discussions" with the U.S. Treasury on its proposal to swap government debt for equity in the largest U.S. automaker.

Finally, GM is negotiating with the UAW and is seeking to get the union to take GM stock in exchange for $10 billion owed to a trust fund for retiree healthcare.

Those talks were set to resume this week in Detroit, Henderson said.

GM said in its SEC filing that its three-pronged effort to slash debt could take its total authorized share issuance -- including new and existing shares -- to 62 billion shares.

(Reporting by Kevin Krolicki; editing by Carol Bishopric, Bernard Orr)

[kennynah]

good da...another opportunity coming our way.... if you dare, that is to buy their shares after this new issuance...

[iam802]

nice....

[helios]

means what?

sell or hold out???

[helios]

hovering around 1.5, and buyers participation ...

if it < 1.5 and below, it means we can load more ...

[iam802]

or it could mean...everyone is dumping before it file for bankruptcy??!!

possible???

[helios]

don't know.

only insiders know.

we are just playing a poker game now ... it could be another black swan event too.

i just loaded some at 1.64.

[blid2def]

good da...another opportunity coming our way.... if you dare, that is to buy their shares after this new issuance...

I think that's the keyword. Any other moves before that would be like jumping over a boiling pot of oil without knowing how wide the pot is. But of course, that's because my risk tolerance is low.

[kennynah]

GM earnings conference call 9am their time on 7May09.... am sure they will talk about this shares issue matter....

all the best to the bullish gunghos....