With GM & Ford grasping for air, why wouldn’t everyone be shorting them? GM Short % of Float (as of 10-Oct-08)3: 16.60% Book Value Per Share (mrq): -100.625 EPS (ttm): -103.19
There isn’t much left to short. You’d be wiser to short other companies or use that money to invest in stocks that have been hit harder.
the borrow on both are pretty expensive these days (north of 20%). that short interest does sound maybe a bit low, but then look how big the float is. that’s not exactly a small amount of shares short.
ditto what bannis said. you are talking about some big puppies, dude.
FINforLIL Wrote: ------------------------------------------------------- > There isn’t much left to short. You’d be wiser to > short other companies or use that money to invest > in stocks that have been hit harder. Agreed
The expectations for GM and F are so low that the slightest good news would likely get you burned on a short. By good, I mean they somehow only lose $2 Billion in a quarter as opposed to losing $2.5 Billion. About 3 years ago, I crunched some numbers and made jokes that if I were CEO of GM, I’d fire every single employee, shut down all operations, and pay myself $36 Million a day, taking a $1000/day pay cut for 100 years. Not only would I be saving GM money on day 1, but guarantee improvement every day for 100 years.
Any bailout could send the shares higher. There’s no telling what the government will do next.
Just read that Pelosi wants Paulson to open up the TARP to the automakers.
That is good. Because honestly the TARP was created so that the banks would make loans to companies such as those in the auto industry. With the banks clinging to money like Scruge McDuck, direct injections of capital are better than letting the likes of JPMorgan do it.
I’d hate to see us throwing a ton of money at this problem that may be beyond repair. There are going be some very tough, painful changes that will need to be made; a bailout for the status quo will not be beneficial long-term.
nor would sending 600,000 people to the unemployment line
jpm351 Wrote: ------------------------------------------------------- > nor would sending 600,000 people to the > unemployment line so you rather fund a business that makes a product no one wants?
PtrainerNY Wrote: ------------------------------------------------------- > jpm351 Wrote: > -------------------------------------------------- > ----- > > nor would sending 600,000 people to the > > unemployment line > > > so you rather fund a business that makes a product > no one wants? GM is the world’s second largest automaker.
If you get rid of the 2nd largest, then the ones under them who are MORE EFFICIENT expand NakedPuts Wrote: ------------------------------------------------------- > PtrainerNY Wrote: > -------------------------------------------------- > ----- > > jpm351 Wrote: > > > -------------------------------------------------- > > > ----- > > > nor would sending 600,000 people to the > > > unemployment line > > > > > > so you rather fund a business that makes a > product > > no one wants? > > GM is the world’s second largest automaker.
bannisja Wrote: ------------------------------------------------------- > the borrow on both are pretty expensive these days > (north of 20%). that short interest does sound > maybe a bit low, but then look how big the float > is. that’s not exactly a small amount of shares > short. This is much more to the point - the borrow is expensive and difficult and risky. The gov’t is going to try to do something about this. I wish I could figure out how it’s going to work, but I can’t. I think these companies are close to toast and that is a terrible thing. Is that leftist Bush going to nationalize the auto industry too?
TARP isnt for dumping money into auto makers! It is for buying assets off banks so they will be strong and lend again. Giving automakers tarp money just cuts out the part the plan was intended to do, relieve banks and let the flow of money start again. Tapping into that pool for this is stupid. Now that we have a democrat coming into office there should be plenty of different pools of money for everyone…not that the conservatives were fiscally conservative.
^ I agree completely with that. The problems of automakers can’t be solved this way. The banks were highly profitable and productive businesses that stepped on the mother of all land mines and exploded. If we can put them back together again, they will resume being profitable and productive. That is not true of US automakers (who might be productive but won’t be profitable anytime soon).
Their labor and legacy costs will prevent them from being viable entities. I would like to see consolidation within the industry to streamline operations, leverage existing R&D, reduce workforce and reduce pension costs, etc. If government funding can help facilitate this I am OK with using government money but we can’t keep throwing money out the window!
Does consolidation really do anything here? I’m not convinced. Merging three dysfunctional things together rarely makes something very functional.
I imagine there is a tremendous amount of redundancies… and they could piece together a more compelling product line from the best each of them has to offer.