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Politics : Sioux Nation
DJT 16.10+8.3%Dec 19 9:30 AM EST
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To: stockman_scott who wrote (164707)3/31/2009 3:19:22 AM
From: Travis_Bickle  Read Replies (1) of 361700
 
"Bondholders will now be asked to take stock in G.M. in exchange for more than two-thirds of the money they are owed."

So if you buy GM debt for .18 you get .66 of common stock and GM now owes you .33 ... that could work. If you could sell the stock quick enough to realize at least .18 for it then the remaining .33 debt is free and will be worth something, though not .33.

Would work a lot better if the government gave the bondholders the right to short GM stock naked, that way they would be assured of turning a profit on the deal ... if your .66 of common plunges to .02 before you can sell it then it's not a very good deal for you.
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