The WSJ is out with a muchly regurgitated piece, which may, however, finally end up being right. Turns out the negotiations between bondholders, General Motors (GM) and the intractable UAW are moving at the same pace as cars on a showroom floor. On February 17 GM is set to give the taxpayers a progress to report; and probably as for more money. With 48 hours to go, there has been minimal progress, it may finally be time to pull the plug.
GM's options are asking the administration for more money, which at this point has a one in a million chance of being granted (so I'm saying there's a chance), or filing for some kind of bankruptcy protection. Bankruptsy may be teh only truly viable long-term option, GM does still have solid revenue, despite low profit margins. Hopefully it also takes Chrysler with it.
One plan includes a Chapter 11 filing that would assemble all of GM's viable assets, including some U.S. brands and international operations, into a new company. The undesirable assets would be liquidated or sold under protection of a bankruptcy court. Contracts with bondholders, unions, dealers and suppliers would also be reworked.
Now is the time to short the stock.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment