Could GM REALLY go to ZERO!?
Plant, property and equipment alone would be worth more than that.
Best Answer
350 points
Sensei answered one year ago …
Anything CAN happen so, yes, GM could go to zero. The chances of this happening are slim since I think the US government would step in and do whatever was necessary to keep it alive. The stock might not be worth much, but it will still exist (i.e. it won't go to zero.)
The idea of GM being taken over by Honda or Toyota is anathema to the US. Obama already has his knickers in a knot over "good US jobs being exported" so you can imagine what might happen if a Japanese company took over a huge manufacturer like GM. Again, his administration will do whatever to keep GM going.
Having said that, GM could go to "pennies a share" and I think that very likely could happen.
If you want to see a total collapse of a major enterprise, the best example I can think of now is Nortel - a huge Canadian company that once was a market darling. In early 2000, the stock traded (in Canadian dollars) for over $ 125 a share. Adjusting for a 1 for 10 reverse split a few years ago, that would be $ 1,250. You can buy all you want today for $ 1. That means the original stock you bought for $ 125 is only worth 10 cents today!
Think it can't happen to GM? Think again.
Answers
991 points
rvilmur answered one year ago …
Yes, it will unless there is a huge loan or capital infusion from the Federal government. Right now sales are not high enough to cover expenses and GM's cash position is dropping rapidly. Remember that GM has a lot of bonds out and that shareholders are last in line if the plant, property and equipment are liquidated. In addition their UAW pension plan is way underfunded so GM is effectively bankrupt anyway. I don't expect a long period of lower gas prices to bail them out either as I expect oil and gasoline prices to go back up next year.
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180 points
kobla answered one year ago …
There are so many car companies these days,, if they went out of business a foreign company would step up and take there place. Its not like the old days ware there was only 3 car makers in the US,or they could go bankrupt and get bought out by Honda and they stock could end up like Washington Mutual
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