GM now a penny stock
NEW YORK–Shares of General Motors Corp. fell below $1 on Friday for the first time in 76 years as the struggling automaker approached a government-imposed restructuring deadline and a likely filing for Chapter 11 bankruptcy protection.
GM shares lost more than 22 per cent to fall as low as 87 cents in morning trading. It was the stock’s lowest trade since April 18, 1933, according to the Center for Research in Security Prices at the University of Chicago.
Shares rebounded to 89 cents by late morning.
The symbolic drop comes just days ahead of a government-mandated June 1 deadline to restructure. GM is expected to file for Chapter 11 bankruptcy protection by then, which would leave existing shareholders virtually wiped out.
A senior Obama administration official estimated that GM would be under bankruptcy protection for 60 to 90 days, longer than Chrysler LLC’s expected reorganization because GM is bigger and more complex. The official spoke on condition of anonymity because of the sensitivity of the negotiations.
GM’s new road map, outlined in a regulatory filing Thursday, would briefly send the automaker into bankruptcy protection, erase most of its debt and eventually have it emerge leaner and stronger.
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Posted on November 25th, 2009 at 5:22 am
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Posted on November 25th, 2009 at 5:46 am