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General Motors Company Message Board

  • jus_rain68 jus_rain68 Sep 6, 2011 9:01 AM Flag

    When will GM wake Up -part 2

    GM is hoarding cash
    GM is not paying a dividend even with 35 Billion in cash
    GM is paying interest on long term auto debt ( a waste of assets)
    GM is paying interest on series A atock ( a waste of assets), nobody gets 9% even Buffet only gets 6% from BOA.
    GM is not buying its own stock in the open market, even at cheap prices,will they buy at 20 or 15 or 10 dollars a share.
    GM is asleep,Its stock will have little support from investors until it starts a share buyback in the open market, it declares a dividend, it pays off its debts and stops the waste of money on interest payments that can be avoided.

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    • No argument, you are correct. A stock can be down temporarily even though it has potential. Personally, however, I see ZERO potential in GM. Zip.

      JMHO

    • That's right.

      -web

    • And, condescension and profanity on your part isn't a problem....

    • jus-rain68,

      The bankruptcy deal prevents GM from paying a dividend before repaying its debt to taxpayers.

      Paying interest on its debt is not a waste of assets -- it's a cost of doing business.

      GM cannot use its cash to repurchase stock. Again, that was part of the bankruptcy/bailout deal. Taxpayers would go crazy if such a move were permitted.

      However, if GM were able to purchase the shares the government -- at current markeprices -- that would be good news for investors, but bad news for taxpayers, who need to get about $55 per share to break even.

      • 1 Reply to no_slappz
      • That is not true. GM csn pay dividends and does every quarter just not on its common stock. They could pay a dividend on common as long as the pre stock series A and B dividends are up to date.

        As to repaying the US govt the share price would have to rise before the govt could break even or make a profit.

        GM is not to concerned about this as they are forcing the share price lower by not having a common share buyback program and not paying a dividend on its common.

        Instead GM is wasting money paying interest on debts it should not have. What CFO would pay nearly 1 billion in interest a year instead of using that money to retire debt or pay dividends.

    • Rightfully so, yes.

      -web

    • hey, they are on their what, 5th CEO in 3 years? You have to give them credit for trying. trying what, I have no idea.

      The line is stale and overpriced. MPG is not competitive, and everybody in the country has a reason to NOT buy GM. Under these conditions, I think they are doing really well.

    • Now, didn't you accuse me of condescension?

    • <<<<"Today GM stock is owned by traders who make more money driving the stock down than holding it.">>>>>

      <<<Precisely!>>>

      Precisely WRONG, maybe.

      It was stupid when he said it, and even stupider when you applauded it. With rare exceptions, investors do NOT make money driving down a stock they own. It's absurd on its face.

      -web

    • "Today GM stock is owned by traders who make more money driving the stock down than holding it."

      Precisely! GM is a "show me" stock obviously, as a casual reading of this board makes abundantly clear.

      Consistentcy is critical to building wealth. And, dividends, especially strong dividends that are SYSTEMATICALLY REINVESTED over long periods, creates a powerful compounding effect. It's a powerful mathematical phenomena that's not well understood.

    • "I guess my thoughts are slightly jaded as I was in the business in the 90's when no one cared at all about dividends (ie. tech stocks)."

      Precisely!

      I'm not gonna argue with you about your or anyone else about investing styles or objectives, it's a personal matter. However, your statement show why a stock with potential can be in downtrend on temporary basis---it's simply out of favor, but not without its merits.

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