Comments on: Dumb investors in GMGMQ.PK (the old General Motor)

By: sanay

sanay — Wed, 07 Oct 2009 22:02:30 +0000

“Please wake up! Anyone thinks that one can double their money in GMGMQ stock (or Citibank/AIG stock)”

Citi had doubled, what do you say to that?

By: Walter Thatcher

Walter Thatcher — Mon, 07 Sep 2009 22:15:14 +0000

I wrote about this on my blog, Stocks For All Seasons. It’s amazing that a zombie company like Motors Liquidation Company can trade over 34 million shares per day. It’s completely worthless, it just a vehicle for speculation, pure and simple. Still, there are those who still preach that the market is rational.

By: Stephen

Stephen — Fri, 04 Sep 2009 15:49:45 +0000

Thank you for answering my question Frugal. I don’t own any General Growth stock but one of my friends bought some recently and I was worried a bit.

By: Frugal

Frugal — Fri, 04 Sep 2009 02:52:17 +0000

Stephen,

General Growth will may have some small remaining value (but I have not done much due diligence). But I will not hold the bankrupt companies shares in general. Usually, secure bondholders will come out much ahead of everyone else. Shareholders will only get the leftover (if any). If I want to hold thru my position in the bankrupt company, I will try to switch the shares into bonds (secure, preferably). At the end, bondholders will probably get an equity conversion (which is stock in the new company) once the company emerges out of bankruptcy, and/or some cash after partial/total liquidation.

In any case, it is often VERY HARD to evaluate the worth of the bankrupt company, relative to other public companies. One has to be extremely thorough, going thru the entire balance sheet, re-evaluating every item in a liquidated mode. You will need to be as sharp as the bankruptcy judge to get a correct valuation.

Good luck.

By: Stephen

Stephen — Mon, 24 Aug 2009 16:39:11 +0000

Are all the stocks of the companies in reorganization worthless? I read somewhere the old GM stocks will be worth zero eventually. What about General Growth properties? It’s trading under GGWPQ.PK. Will it be worthless too eventually or is it different?

By: MG

MG — Tue, 14 Jul 2009 19:54:59 +0000

Not sure that these are individual investors buying old GM, but rather “investment” firms who are “investing” for retirement funds, pension funds, and endowment funds and trusts.

Reason being these “investment” firm traders are making their money on the fees and commissions associated with the trades.

Whether the particular fund (retirement/pension/endowment/trusts) gets screwed or not means nothing to these guys….its all about making money off of the trade.