Those of you trading General Motors (GMGMQ) stock in the pink sheets, GM today sent you a friendly reminder to just stop it. The stock will probably not have any value, as the bankruptcy proceedings won’t meet the obligations to the company’s creditors, much less leave anything on the table:
GM management has noticed the continuing high trading volume in GM’s common stock at prices in excess of $1. GM management continues to remind investors of its strong belief that there will be no value for the common stockholders in the bankruptcy liquidation process, even under the most optimistic of scenarios. Stockholders of a company in chapter 11 generally receive value only if all claims of the company’s secured and unsecured creditors are fully satisfied. In this case, GM management strongly believes all such claims will not be fully satisfied, leading to its conclusion that GM common stock will have no value.
This is much as I anticipated in a “Barron’s Take” article earlier this month, when GM entered bankruptcy.
At any rate, GM shares, after trading in the dollar range most of the day, are now down almost 30% at 78 cents.
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