Now, don't get me wrong, I don't think that Uncle Sam will actually make them file for Chapter 11 protection. However, they are talking about turning thier $15B+ 'investment' into equity and forcing the bondholders and creditors to take equity stakes as a swap. The retirees are being asked to take equity also for Billions...
Jesus, what would be left through dilution even if they don't file?
Why in the hell would anyone be jumping into this??
Don't forget the bond holders. They have to agree to eat it big (90% of them need to sign off on a new deal). Some of them are not idiots, and have likely hedged the potential for bankruptcy with CDS swaps.
Put bluntly, one of the key parties that must agree to a haircut in order to keep GM out of bankruptcy likely has protection in place that would pay them substantially more should ch 11 occur. The gov (IMO) has been trying to ease the public around an inevitable bankruptcy, by acting like it is no big deal, and continuing to funnel taxpayer money to GM that will likely never be recovered.
As for who the heck is buying, I can only think this is the gift of more taxpayer money, offering an opportunity for current shareholders to get *something* out if they're smart enough to sell on last gasp rallies.
People have been buying the crappiest 'hail Mary' stocks out there hoping to get one or more winners. Some can't believe that certain companies can disappear. Hell, for a grand they can say I HAVE 1,000 SHARES OF XYZ. I did it myself with WAMU, that was enough to convince me, sold a small rip and got out.
Meanwhile, Sheila Bair is on talking about shutting down banks. Looks like maybe the bulls party is over for a while.
By the same token, look at Ford...yes, they might escape TARP but that's only because they leveraged out every single asset before the credit crunch. Their debt load is equally high and they aren't selling cars either (ok, less worsey than GM and Chrysler). That has tripled...
I've worked in this industry for 15 years...this is way beyond f'ed up.