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Strategies & Market Trends : Value Investing

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To: Madharry who wrote (40138)	11/19/2010 12:28:00 AM
From: Spekulatius	Read Replies (4) of 78921

re GM - make sure you are not the bagholder. Even after the bankruptcy, the balance sheet does not look that pretty to me: sec.gov 1.5B shares outstanding @33$=49.5B$ market cap. For that you get: 23.&B$ in equity (15.8$/share) ~49B$ in intangibles ! ~27B$ in pension and health care underfunding (this number appears to be growing due to low interest rates - they have a 8.4% cap rate) ~3.5$/share in "earnings" It's amazing that this equity piece was offered to the public. I don't even see a real cash flow statement in the filings, with all the adjustments and fresh start accounting it's hard to back out the operating numbers. Tangible equity seems deeply in the red. Why in the hell would you buy a mediocre car company at 2x stated book? GM might look OK in the recovery phase but at the next recession - they will be looking into the bankruptcy abyss again.

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