Old GM Stock Rallies Again. Good News For GM IPO?

Edward Niedermeyer
by Edward Niedermeyer

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!

Edward Niedermeyer
Edward Niedermeyer

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  • Robert.Walter Robert.Walter on Jan 19, 2010

    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?

  • Skor Skor on Jan 19, 2010
    "Madness is rare in individuals, but in groups, parties, nations and ages is it the rule" --Friedrich Nietzsche
  • Criminalenterprise Criminalenterprise on Jan 19, 2010

    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.

  • Mr Carpenter Mr Carpenter on Jan 20, 2010

    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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