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Old 06-21-2009, 09:04 PM
 
107 posts, read 318,039 times
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I was thinking about buying GM stock and hoping for the best. I would assume that things will eventually turn around for them. Is this a bad idea?
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Old 06-21-2009, 10:22 PM
 
3,514 posts, read 4,561,977 times
Reputation: 5294
Why don't you tell us why you think that it would be a good idea?

Is GM making a profit?

Will GM's legacy costs (massively underfunded pension accounts) improve their profitability over time?

Are GM's new cars capturing people's attention?

GM is selling a lot of cars in China. Will those sales offset the market share loss they are experiencing in the USA and elsewhere?

Will bankruptcy improve shareholder value, especially if the government gets a ~60% stake? (The government taking a stake means that the common shareholders will get vastly diluted shares, thus, much lower earnings per share, and less likely chance that dividend payments will resume.)

I would like to know why some people think that bankrupt companies are a good buy (GM), while profitable and growing companies are a bad buy (ADM). ADM just bought out a German company's cocoa processing facilities and obtained their market share. ADM also pays a dividend, which it grows year by year. Food is becoming more important; although grain prices continue to rise (wheat, soybeans, corn, cocoa), ADM can pass those increases along to their customers, which are the food producers. This is just one example, of course; others could find similar companies that perhaps represent a better investing value than GM.
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Old 06-22-2009, 07:12 AM
 
22,769 posts, read 28,500,845 times
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I agree with Teak. Whether or not GM will ever turn around and make a profit is only one issue at hand. The other issue is the value of your shares in GM, and what can/will happen to them in the near future in terms of dilution.
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Old 06-22-2009, 08:18 AM
 
14,256 posts, read 16,626,304 times
Reputation: 13776
I wouldn't touch them with a ten foot pole.
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Old 06-22-2009, 11:12 AM
 
Location: Rockland County New York
2,984 posts, read 5,523,491 times
Reputation: 1295
After what the government did to Chryslers bond holders why would any one want to buy GM stock? I don't trust either.
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Old 06-22-2009, 12:50 PM
 
Location: Heartland Florida
9,324 posts, read 25,146,322 times
Reputation: 4983
GM is finished. Who would buy stock in a company that cannot pay dividends?
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Old 06-22-2009, 02:08 PM
 
1,778 posts, read 2,774,566 times
Reputation: 2161
Wait until the new shares are issued. The current shareholders will be wiped out sometime over the next 60 days or so. If you choose to buy now, you might as well just throw your money out the window of a speeding car.
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Old 06-22-2009, 03:48 PM
 
69,360 posts, read 59,877,212 times
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Um, the stock is worthless, they are going to retire the current stock and issue new stock NEXT YEAR.. Not a chance I'm touching it..
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Old 06-22-2009, 03:49 PM
 
69,360 posts, read 59,877,212 times
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Quote:
Originally Posted by tallrick View Post
GM is finished. Who would buy stock in a company that cannot pay dividends?
Lots of people, with your attitude, you just lost $100K buy not buying Buffets stock PER SHARE..
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Old 06-22-2009, 04:34 PM
 
Location: Northern California
3,700 posts, read 13,906,756 times
Reputation: 1893
I say go for it. GM is selling for about $1.22 a share. Who knows, maybe they'll come back. Even if the shares go up to $5 a share, you will have made money. However, I wouldn't spend anymore than you can afford to lose.
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