Once Mighty General Motors to File Bankruptcy Tomorrow
May 31, 2009
Posted by Jody Eisenman | Filed under Uncategorized
“What’s good for General Motors is good for this country” were the immortal words of Charlie Wilson, the one time president of GM. Well, GM is widely expected to file a pre-packaged bankruptcy on Monday, which will ultimately leave the company in the hands of the bondholders, the United Auto Workers Union, and the US government. The current shareholders are probably going to end up with little to nothing. As I wrote last week, “I do think that the ultimate value of GM stock is probably a lot lower than the current price”. GM was then trading at $1.42. It closed Friday at $.75. Another mighty icon has fallen.
Meanwhile, real estate prices continue to drop and the nations’ unemployment rate continues to rise. However, the stock and bond markets continue to shrug off this news and climb higher. The S and P 500 closed Friday at 919, or eleven points off the 2009 high of 930. I continue to believe that the 930/950 area of the S and P will be a major battleground for stocks. This battle could go on for some time. In the meantime, good luck trading.
