General Motors Corporation (NYSE: GM) has been an ugly stock, in an ugly sector, in an ugly economy. Bailout or no bailout, things are looking haggard and questionable at the auto giant. This morning Deutsche Bank issued a new SELL rating on the stock. If you think that is bad, look at its price target: ZERO!!!
It is very rare that you see firms issue an outright death notice likethis before a company has formally gone into a court assisted reorganization. But $0.00 is the target. The prior HOLD rating is now a SELL rating. This call is not for the death of the company northe death of a sector. But if and when a bankruptcy protection filingcomes for reorganization comes about, then shareholders are going tofeel like they fought a few rounds with a professional boxer.
This weekend Barron’s also said that GM is driving towards a governmentbailout. But it warns: "GM may survive with government help, but steerclear of the stock."
It looks more and more like the bondholders who hold billions andbillions of debt in the US auto giant will get to run this company. GM shares are down 10% at $3.90 in early pre-market trading.
Ford Motor Co. (NYSE: F) is also down in symapthy, but only by about 2% at $1.985.
Jon C. Ogg
November 10, 2008
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