By on January 19, 2010

Can't say no? (courtesy:allengenitski.com)

Shortly after GM’s bankruptcy, we wondered why so many people were still trading “old GM” stock. After all, old GM stock is in a liquidation company with no chance of ever emerging from bankruptcy.  In order to clear up any confusion, the SEC forced GM Liquidation (then GMGMQ) to change its ticker to MTLQQ. Apparently that didn’t work. CNN Money reports:

On Jan. 11, the first day of the big auto show in Detroit, about 41.6 million shares of MTLQQ exchanged hands. To put that in perspective, that’s more than the volume of Apple (AAPL, Fortune 500), Google (GOOG, Fortune 500) and IBM (IBM, Fortune 500) combined that day.

Holy fiduciary responsibility, Batman! The report goes on to note that MTLQQ is the ninth most-researched stock of 2010 at CNN Money, beating stocks like Microsoft and ExxonMobile. TTAC has expressed skepticism in the past about GM’s forthcoming IPO on silly grounds like the firm’s lack of profit, turmoil in overseas divisions, weak sales and questionable strategy. Frankly, this news makes us question whether any of these things matter. If a 70 cent (but worthless) stock in a company that has no bearing on New GM can rack up that kind of trading volume, clearly there are some unfathomable dynamics at play. Maybe a $60b GM IPO market cap is possible after all!

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18 Comments on “Old GM Stock Rallies Again. Good News For GM IPO?...”


  • avatar
    CyCarConsulting

    The dynamics are a few insider traders are going to have a windfall, and the rest of the public is about to get hosed.

    • 0 avatar

      Then you’d better scrape your money together and get in on the ground floor ipo.

      i got in on Ford a couple of times when it was less than $1.70

      Now I’m rolling in cash from that one bet alone. GM already has at least $5000 coming from me !

  • avatar
    tced2

    The stock of “old GM” (Motors Liquidation Corp) is essentially unrelated to the “new GM”.  All the money losing things and other liabilities have been left with the old GM.

  • avatar
    Steven02

    Quite interesting…
     
    My take on the stock market, logic doesn’t apply.
    I work for a company that makes money.  A lot of it.  It makes money every quarter while competitors are losing money.  Nice growth is shown every quarter.  It makes great products, has great service, and has great quality.  The stock market has not been kind to my company.  How does that make any sense?

    • 0 avatar
      Robert.Walter

      Sure, as long as they keep behaving like that, there is so little chance of your company receiving any TARP money…

    • 0 avatar
      Steven02

      That made me smile.  Thanks Robert.

    • 0 avatar
      johnny ro

      you are lucky to work there but maybe that happy growth is already priced into the stock and its trading at the upper margins of optimism already. What you should do is go back in time and buy low.

    • 0 avatar
      baldheadeddork

      Would you mind sharing what company you work for? There are a lot of reasons why investors don’t like some sectors or companies, and sometimes they’re good reasons even if you’re profitable and growing.

    • 0 avatar
      Disaster

      That is how the stock market works.  It is gambling and the lottery.  The only reason the old stock is being traded at all is because it goes up and down and people make money from it.  Stocks today, have little to do with the actual value of the companies they represent.

  • avatar

    Holy hotdog, Batman! You mean my two shares are worth a couple of quarters???! I should trade them in for a candy bar while the trading is good.

  • avatar
    sitting@home

    Let’s face it, Wall St. is no different from Las Vegas. Traders don’t care what a company does, as long as its share price does what they gamble it will in the future. The more volatile a stock, the more opportunities to make a quick buck as the value swings up and down, and money can be made on both up and down swings. The only thing they don’t want is to still be holding the stock when the company finally gets delisted.

  • avatar
    DrX

    Remarkable how many people have fallen into this little game, which is essentially just a game of musical chairs to see who will be left standing when the music stops. Or in this case, who will be left holding old GM shares when the stock gets de-listed. I guess it’s not surprising though considering that practically anyone can open an online brokerage account. The only people trading this stock are:
    1. Scammers/bottom feeders hyping the stock on online investment discussion boards looking to pump and dump the stock for a profit and…
    2. Clueless amateur day-traders putzing around with online brokerage accounts.
    The former are taking the latter for a ride, and that’s pretty much all it amounts to. As far as what it says about a future GM IPO, not much at all. For a successful IPO, GM is going to need serious support from real, professional investors, not just some ignorant dumbasses screwing around with their Ameritrade/Scottrade/etc… accounts.

  • avatar
    Robert.Walter

    1.  Why is this stock still allowed to trade?
    2. Doesn’t this smack of some kind of wierd plan to “reverse short” the stock?

  • avatar
    skor

    “Madness is rare in individuals, but in groups, parties, nations and ages is it the rule”

    –Friedrich Nietzsche

  • avatar
    criminalenterprise

    I imagine the stock was allowed to trade in order for the derivatives markets to continue executing outstanding warrants and swaps.
     
    The equity value of the company is indeed zero, but the traded price will be somewhere above that as long as contracts allow a counterparty to have stock put to it.

  • avatar
    Mr Carpenter

    I’m one of those “dumbasses” who’d had enough of the stock market and started “screwing around with control over” my own 401k.  

    As long as you don’t look to get rich quick, and do read a lot, pick a direction, and are willing to change direction with the changes in the wind, you might come out okay.  Though I think some dumb luck helps, too.  

    Suffice to say I’ve done a lot better than the stock market.  I have a lot to be thankful for and much of it came from listening/reading a lot of “crazy” largely ignored gold bug type folks over the past 6-7 years.  

    I’m going to be able to retire in less than a decade, so is my wife.   At ages 62 and 60.  

    Assuming, of course, that the current PTB don’t simply “declare” that all 401k monies are “nationalized” and steal it from us.  

    Hey, it happened in Argentina recently; Bingo the Occupant of our White House thinks he can do anything he wants.  Or at least he did before yesterday, anyway…. 


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