GM Dumps Ally Shares, Announces Dividend
Automotive News [sub] reports that GM has sold $1b worth of preferred stock in Ally Financial, the bank holding company that emerged from the wreckage of GM’s former in-house lender GMAC. GM will book $300m on the deal, which will take its ownership stake in the lender to 9.9 percent. GM will likely continue to reduce its exposure to Ally, which is 74% owned by the US Treasury, as its new CFO seeks to rebuild its in-house lending capabilities. GM’s move away from Ally has intensified competition between the financial firm and GM’s new financing arm, which has been built on the acquisition of subprime lender AmeriCredit. This mounting competition has been criticized by the TARP Congressional Oversight Panel, which rapped GM for failing to find a win-win solution for its own financing needs and the viability of the taxpayer-owned Ally. Amman’s strategy for avoiding further conflict: sticking with subprime and floorplan lending, leaving prime auto lending to Ally. But, argues analyst Maryann Keller
Floor-plan lending is about building an individual relationship with a lender. To get them to switch, you need to get people on the ground and get out and talk to dealers and build those relationships.
Meanwhile, with its stock struggling to achieve the value projected for it by several analysts, GM has approved a second quarterly dividend of $0.594 per share on its Series B mandatory convertible junior preferred stock. More cash and a new dividend seem likely to pump up GM’s stock price a little, but it is unlikely to reach the $55-ish price needed to pay back the government’s equity investment in the short term.
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Corporate culture still a mess - check Too many GM lifer's still in leadership roles - check Reputation still perceived as below Asian competitors and Ford - check GM leadership still ignoring reality with needed product warranty to instill buyer confidence - check Gee, why is the stock not going up?
1. The dividend is on the preferred stock, not the common. It is more or less mandatory -- being cumulative. That is, they can NEVER pay a common dividend before the preferred is current. 2. Americredit was a very solid sub prime lender before purchased by the General. 3. The fact that TARP oversight doesn't like it means it is probably a good deal for GM. 4. I don't like Ally. Period. Ditching them is a solid idea. 5. The future for GM profit is global X US. Especially China. Having said all that, I have no idea about the value of GM common stock and whether it is over or under valued. It is pretty cheap as a firm -- but if it can't make a profit, then it is worthless. I'll leave investing in Auto companies to the smart money guys. Global capacity glut -- tough business. Remember Ditech mortgage loan advertising from back in the Day? It was GMAC. It is a huge, complex mess and frankly I don't think it worth the effort to try to sort it out. The main point being that whatever is going on, it isn't simply a rerun.
back in the 20's Morgan and duPont took Billy's stock after betraying him in their Wall Street syndicate. eventually the duPonts were made to divest but the Morgan influence has remained over time, including the eras of Ellmore Patterson and Sir Dennis Weatherstone. also of note has been the interlocking Morgan directors like Walter Fallon of Kodak and Edmund Pratt of Pfizer, both Morgan men of sorts...along with the ever Hon. George Schultz. even today we see more of the same...Morgan men in positions of financial control at GM and other large corporate institutions. like their predecessor old JP himself, these men continue to diligently and loyally serve their European banking masters, much the same as do Federal Reserve Chairmen. like they say...it's good to be the Bank. see The Buickman on FaceBook www.Generalwatch.com
back in the 20's Morgan and duPont took Billy's stock after betraying him in their Wall Street syndicate. eventually the duPonts were made to divest but the Morgan influence has remained over time, including the eras of Ellmore Patterson and Sir Dennis Weatherstone. also of note has been the interlocking Morgan directors like Walter Fallon of Kodak and Edmund Pratt of Pfizer, both Morgan men of sorts...along with the ever Hon. George Schultz. even today we see more of the same...Morgan men in positions of financial control at GM and other large corporate institutions. like their predecessor old JP himself, these men continue to diligently and loyally serve their European banking masters, much the same as do Federal Reserve Chairmen. like they say...it's good to be the Bank. see The Buickman on FaceBook www.GeneralWatch.com