It’s at 1.21 right now. What gives? When they file for bankruptcy stockholders will get nothing. Can someone explain this?
Take a look at Lehman when they filed.
Yea, but I guess my question is why people don’t short these stocks into oblivion? The chances of GM recovering is pretty much zero. Is it a sentimental reason? Is it hope of a turnaround? Edit: Seems to me that investors can pick up some quick cash here, no? All they have to do is short and wait for GM to file for bankruptcy in the next week or two (virtual certainty).
I really have no idea, but maybe some people think that outside forces will help once more and send the stock up higher than it currently is. So maybe the $1.21 represents ‘hope’? “Hope is a good thing, maybe the best of things, and someone always told me that good things never die.” . . . name that movie
philip.platt Wrote: ------------------------------------------------------- > I really have no idea, but maybe some people think > that outside forces will help once more and send > the stock up higher than it currently is. > > So maybe the $1.21 represents ‘hope’? > > “Hope is a good thing, maybe the best of things, > and someone always told me that good things never > die.” . . . name that movie GM hasn’t made any “good things” for quite some time
QUOTE: “Hope is a good thing, maybe the best of things, and someone always told me that good things never die.” . . . name that movie Easy… Shawshank Redemption, my fave movie.
^ haha yeah Shawshank artvandalay - - I agree
Oddly, I wonder why no one follows AMC’s path? Making good and “bad” cars with the ability to raise capital like it’s no one’s business.
Try shorting GM in your brokerage account and see what happens. I couldn’t even get borrow on 200 shares. Even if you could get borrow you’re going to get charged through the @ss in margin interest. The only way to play the short is via puts, which are trading at massive premiums right now.
The $1.00 puts are trading at $0.53, which represents almost the 100% gain of shorting the stock to zero in a bankruptcy scenario.
Except the stock doesn’t go to 0 in a bankruptcy. Existing shareholders are getting 1% of the new equity which translates into a current stock price somewhere in the 15-20 cent range. And even when a company files the stock doesn’t immediately trade down to bankruptcy levels, so if the stock continues to drift slowly lower through June options expiration you could still theoretically lose money on that trade.
There was a thread on this a week or two ago. The d for e swap was never going to happen. GM needs to go ahead and file chapter 11 and quit dragging out this charade.
Even if you could find a borrow for GM right now, the current cost to short GM is around 70-80% annualized
Yeah, this falls firmly in the camp of too many people paying attention and looking for a way to play it. No opportunity.
JohnThainsLimoDriver Wrote: ------------------------------------------------------- > Except the stock doesn’t go to 0 in a bankruptcy. > Existing shareholders are getting 1% of the new > equity which translates into a current stock price > somewhere in the 15-20 cent range. And even when a > company files the stock doesn’t immediately trade > down to bankruptcy levels, so if the stock > continues to drift slowly lower through June > options expiration you could still theoretically > lose money on that trade. That’s the out of court plan. I don’t think they will get anything in court. Interesting to see what happens if there is actually some sort of valuation fight. Not sure they can ram through a 363 sale like they did with Chrysler.
You’re probably right, but the stock will never trade to 0 as long as there is some probability that the shareholders get something in the restructuring. Even if they only get 2 cents, anyone who buys at 1 cent would still make 100%, so the stock will always retain some value until it is officially dead and buried.
The Chrysler sale was as crooked as they come. It turns out there’s a high correlation between dealerships closed and Republican donors. Chrysler said they had no say which dealerships was closed, it was decided by the White House… accountant23 Wrote: ------------------------------------------------------- > JohnThainsLimoDriver Wrote: > -------------------------------------------------- > ----- > > Except the stock doesn’t go to 0 in a > bankruptcy. > > Existing shareholders are getting 1% of the new > > equity which translates into a current stock > price > > somewhere in the 15-20 cent range. And even when > a > > company files the stock doesn’t immediately > trade > > down to bankruptcy levels, so if the stock > > continues to drift slowly lower through June > > options expiration you could still > theoretically > > lose money on that trade. > > > That’s the out of court plan. I don’t think they > will get anything in court. > > Interesting to see what happens if there is > actually some sort of valuation fight. Not sure > they can ram through a 363 sale like they did with > Chrysler.
gm is on the government can’t short list - you can’t short it
Halberstram Wrote: ------------------------------------------------------- > gm is on the government can’t short list - you > can’t short it When did it go on the list? About 15% of shares were short as of 3/31.
http://www.marketwatch.com/story/short-sale-ban-list-expanded-to-include-ge-gm-28-others sep 22 accorrding to this. THe only reason I know is because I tried to short it at 2 a couple months back and tradeking said shorting is not allowed for this stock. The 15% short could be grandfather shorts, or shorts that were put on before the rule was in place.