GM stock hits 74 year low.
General Motors Corp. shares on Friday tumbled to their lowest level in more than 70 years, pulled down by a drop in the broader markets and continued speculation about the future of the struggling automaker.
GM shares hit a low of $1.52 in early afternoon trading, before rebounding somewhat to close down 23 cents, or 11.5 percent, at $1.77. The low matched a record set on July 26, 1934, according to the Center for Research in Security Prices at the University of Chicago.
The price is adjusted for splits and other changes.
The Detroit-based automaker’s shares have been battered over the past year by worries about the viability of the U.S. auto industry and plunging sales stemming from the industrywide drop in demand for new vehicles.
GM shares were worth $3.50 just a month ago and $25.54 a year ago.
On Tuesday, GM said it would need a total of $30 billion in federal aid in order to avoid filing for bankruptcy protection, up from a previous estimate of $18 billion and including $13.4 billion it has already received. It also said it would need to cut 47,000 jobs worldwide and close five more U.S. factories.
Analysts have said that regardless of whether the automaker receives additional government help or ultimately files for bankruptcy protection, its shares are close to worthless.
Joseph C. Amaturo of Buckingham Research Group said Thursday that a Chapter 11 bankruptcy filing at the automaker would be in the best interest of everyone, especially the American taxpayer.
In a note to investors, he backed his “Underperform” rating for the GM and cut his price target to $0 from $1.
GM stock has been over valued for a long time. Now it’s essentially worthless. No amount of government bailout money is going to change that. I think it will hit the delisting point soon. Bankruptcy isn’t an if, it’s a when.
Recessions are a necessary part of the economy. Like seasons and forest fires, they strip out the dead and useless and leave room for new growth. Recessions are not a crises to be managed and trying to avoid or mitigate them only make things worse. The ONLY thing that government spending can do to a recession is make it worse.
GM management is pretty bad, but it’s no worse than management at any other company. It’s the burden of inflexible union contracts that killed GM. Like an old tree covered with dead limbs GM needs to be pruned back to health or cut down.