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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: energyplay who wrote (197389)	4/21/2009 4:41:07 PM
From: ajtj99	Respond to of 306849

GM is using a 2-pronged approach to thinning the dealers. They are going to starve them for product (Pontiac, Saturn, Hummer) or kill their financing. They can thin the dealers without going bankrupt, but it would be a better option to go bankrupt.

To: energyplay who wrote (197389)	4/21/2009 4:46:28 PM
From: Travis_Bickle	Read Replies (1) \| Respond to of 306849

Yeah a GM Chapter 11 is a foregone conclusion otherwise the publicly traded debt wouldn't be available for less than 10 cents on the dollar (2.05 versus 25.00 principal) and a 70% plus yield (if I did the math right, I don't have a calculator handy). It will file chapter 11 by early June, the common and everything else that is publicly traded will be delisted and trade on the pink sheets shortly thereafter. If you have an interest in the common, convertible or debt you will be in a state of limbo for quite some time, nobody will know what the heck is going on, if you are lucky you will get some of the newly issued common or if less lucky some warrants. If you own the common you don't even get a seat at the table. I don't see any way to play the downside, you can't get a borrow on the common to save your life, and the puts don't have a whole lot of meat on the bone.