Not sure about the bonds. But....
DON'T EVER BUY ANY stock with a "Q" at the end of the symbol. It means the company has filed for bankruptcy.... 99.999% of the time, the shareholders end up with absolutely nothing. Case in points include KMRTQ (K-Mart in around 1995, DPHIQ, (The old Delphi that was cancelled this week), etc, etc, etc,. You buy the stock and some day a judge comes along and halts trading and officially declares the stock worthless. When that happens, all stock is cancelled and no free market trading is allowed any longer. Up until the time the judge declares it worthless, it can trade for any price.
This is how the stock market works. I am always amazed at people who buy bankrupt companies and are surprised that they lose money.
Compare it to a chapter 7 personal bankruptcy (liquidation) where a person has 85,000 in debts and 5,000 in personal assets. What are the odds that the assets valued at 5000(Car, VCR and projection T.V) if sold will bring 85,001? Those are the type of odds shareholders are up against. I am not saying it is impossible. BUT. What are the odds of getting ANYTHING back?
Antony, those other creditors virtually all come behind the binds and will get nada or a pittance, so I think we are going to get significantlymore than the present $3 price. The uncertainty, and problems in buying in volume, are keeping the price down IMHO.
But you are dead right about the time frame for resolving everything -- the bonus to Alix, who are running the liquidation, concerns distribution of the GM shares by mid 2010. So may know earlier than end of 2010. Best, patch
If an investor has his bonds in a margin account, then the bonds are used as collateral for margin loans. To take out a loan you usually give up title to the property until the loan is paid in full.
So the bondholders with their bonds in margin account may not actually have any voting control of the bonds. The bank will vote FOR them.
Same with stocks in margin accounts. The margin account holder has NO VOTING RIGHTS.
So the bank may just TAKE the old GM bonds and convert them into new GM stock and the bondholder may have nothing to say about it.
If the account holder wants to pay cash for the bonds and withdraw them, which would probably require closing down the margin account, then perhaps the investor could get the bond certificates and cash them in.
Wall Street is run by fraudsters and swinlders. Liars! Big liars!
Are you sure of that?
If it is true, it may be worth holding onto them.
My understanding is that since 54% of the bondholders voted to acceot the cram down, that it applies to ALL bonholders.
If you could keep them until maturity for full face value, then why would 54% vote to this awful deal to swap for New GM common shares?
IMO, those shares will not be worth even the $3.00 per bond that you could sell the bonds for tomorrow.
The old state chartered GM corporation is ONLY required to pay to the bonds the GM corporation sold. The old GM corporation is NOT required to pay for the additinal bonds the short sellers sold. The short sellers are NOT bankrtupt. The money they got from selling the extra GM bonds is in the bank. The short sellers can pay for the GM bonds they sold IN FULL.
The short sellers just want to STEAL money from the public investors through FRAUD!
That would not be correct, as the bonds are attached to the liqudation GM company, not new GM. Read the information regarding the liquidation carefully. It says GM bond holders will share the 10% company ownership and 15% warrants for additional owner ship with other unsecured creditors. If you look at the fillings posted on the MLC site, https://www.motorsliquidation.com/Home.aspx, you will see there are a lot of other creditors to share with. The company of attorney's tasked with wrapping up a settlement mid 2010 will get a bonus if they do so. So that mean there is a good chance we will know by end of 2010 what the bonds may be worth. Unlike the stock, I think the limited bond valuations are pretty close. My brokerages have them at around $3 per share. Give or take 20%, that is what we should get in 2011.
There is not discharge of claims for corporations in Chapter 11.
If the GM bondholders do NOT agree with the plan, they can keep their GM bonds until maturity and cash them in, probably for full value. My guess.