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Brian Kent
06-11-2009, 3:31 PM
Last November I invested "heavily" in two great American companies: Ford and GM. My $100 total investment got me 20 shares of GM and 25 shares of Ford. My genius has been verified because today my shares are worth $177.80;).

In words that woodworkers understand, It's like I bought 27 board feet of red oak and today I have the equivalent of 48 board feet. That's pretty great, because red oak doesn't grow on trees, you know!

Please hold your applause. I'm not finished.

Now GM is about to declare bankruptcy and I am concerned about losing my $27 worth of stock (7 b.f. of red oak). Now I don't care if the stock goes down to 2 cents. I would still have a $.40 investment and could by a half a sheet of cheap sandpaper (or a box of gravel paper at Harbor Freight). So here is my question:

AFTER GM's CHAPTER 11 BANKRUPTCY, WILL I STILL OWN 20 SHARES OF GM?

Chris Padilla
06-11-2009, 3:38 PM
GM will still be GM...even after bankruptcy. It all depends on what Wall St thinks about the company...me thinks the info is already priced in...stand pat....

Prashun Patel
06-11-2009, 3:45 PM
Yes, you'll have your 20 shares forever.
However, the value might not be enough for even sandpaper:

The prob is that bankruptcy prone companies are in danger of being delisted from the exchange, which means the shares can't trade easily, and their value goes close to $0. After a reorg, the company typically issues new, fresh stock. The old stuff may or may not be exchangeable for the new stuff, and if it is, it's usually at a big discount. You're holding the bag, basically.

So, trade it for your oak now, and build yourself a barrel to wear.

Brian Kent
06-11-2009, 3:53 PM
Aside from the jokes, that is some of the info I'm looking for - an exchange of old for new.

You know I could go out and buy a hundred shares for about a hundred bucks. If it goes to $.001, I would just keep it quiet. If they go to $20, I would be a genius again! What could I buy for $2000?:rolleyes:

David G Baker
06-11-2009, 4:57 PM
Any company that went bankrupt after I purchased their stock, the stock was worth nothing. GM and Chrysler may be different because the government is involved but I doubt it. Your stock may make a great novelty to frame and hang on the wall. Do what you want but if the stock was mine I would dump it as soon as possible, especially if it is worth anything more than you paid for it and I would do the transaction as soon as humanly possible if it isn't already too late.
After the companies go bankrupt more than likely it will be considered a brand new company and new shares will be issued and sold.
I had several friends that talked about buying Kmart stock when the price bottomed out, I gave them the same advice and they didn't loose a penny but would have lost their investment if they had bought.

Bob Vavricka
06-11-2009, 5:01 PM
What David said. You might want to read this article from the Motley Fool site.
http://www.fool.com/investing/general/2009/06/01/the-death-of-general-motors.aspx

Brian Kent
06-11-2009, 5:28 PM
If I sell my $25.80 worth of GM today, minus the $10 transaction fee…
Are there any good woodworking tools I could buy for $15.80. I could buy about 8% of that shoulder plane I've been wanting.

Wait! I've got the perspective!

If I bought 100 share of GM stock 10 years ago, for $8,910, I would today have $129.

If I bought $8,910 worth of Lie-Nielsen planes 10 years ago, how much would they be worth today?:eek:

Hey honey, I just found an investment that won't lose anything!
Hey, another thing honey, we can invest our IRA's in "art"! (http://www.breseplane.com/)

David G Baker
06-11-2009, 5:51 PM
Brian,
If you had spent the money on beer and recycled the cans regularly you would have been much further ahead than if you had bought the GM stock. :D
The above is true only if you didn't get a DUI.

Steve Rozmiarek
06-11-2009, 5:52 PM
If I sell my $25.80 worth of GM today, minus the $10 transaction fee…
Are there any good woodworking tools I could buy for $15.80. I could buy about 8% of that shoulder plane I've been wanting.

Wait! I've got the perspective!

If I bought 100 share of GM stock 10 years ago, for $8,910, I would today have $129.

If I bought $8,910 worth of Lie-Nielsen planes 10 years ago, how much would they be worth today?:eek:

Hey honey, I just found an investment that won't lose anything!
Hey, another thing honey, we can invest our IRA's in "art"! (http://www.breseplane.com/)

Better yet, $8,819 worth of practically any collector type antique plane would have actually made you money! ;) I can recommend a few sources if you get bit by the collector bug...

Butch Spears
06-11-2009, 6:06 PM
Sell it and invest it in "ssccq" it is about 0.27 per share and watch it grow, 600 shares, just might surprise you. it could be a 1.00 stock by end of year. or sell it when it doubles your investment.

I am not a broker, but I do own a bunch at .19

Larry Edgerton
06-11-2009, 6:18 PM
About 9 monts ago I sold my GM stock, and then when Ford hit bottom at $1.20 I bought 7000 shares. I think I will hold and sell when it hits $22.

Why $22 you ask? That is when I will retire.......

Pat Germain
06-11-2009, 6:43 PM
If I sell my $25.80 worth of GM today, minus the $10 transaction fee…

Don't forget to also deduct capital gains taxes on any profit. It won't be much, but neither is your profit.

Brian Kent
06-11-2009, 8:56 PM
But I bought 20 shares at $2.50 ($50) and they are worth $28.50 today, so how much tax benefit does the government give me for my loss? Maybe I am rich after all!

Prashun Patel
06-12-2009, 8:27 AM
GM just delisted from NYSE

Art Mulder
06-12-2009, 11:08 AM
About 9 monts ago I sold my GM stock, and then when Ford hit bottom at $1.20 I bought 7000 shares. I think I will hold and sell when it hits $22.

Why $22 you ask? That is when I will retire.......

Yeah, that'd be a nice rate of return...

I was just talking to someone a couple days ago who was wishing he'd bought some Ford when it hit bottom. Hindsight.

Jim Becker
06-13-2009, 7:38 PM
You're hosed on that GM investment. Chapter 11 reorganization, more or less, spits out a new company to the best of my knowledge. Common stock shareholders of companies prior to reorganization are pretty much at the bottom of the list when it comes to getting anything. That said, you do get a tax write-off...

Pat Germain
06-14-2009, 9:50 AM
Many people are tempted to buy stock after it has spiralled downward and is hovering just above a dollar. The thought is, "It can only go up!". Alas, it often ends up being worth nothing. Now, it is quite unusual for this to happen to what was once the world's largest company. But we are in unusual times.

Frank Hagan
06-14-2009, 6:14 PM
GM just delisted from NYSE

Yep, it is now GMGMQ.PK, according to yahoo finance.

They were pulled from the S&P 500 also, which shows how much of a lie those admonitions are that say "if you only invested in the S&P 500, your $10,000 investment would be worth xxxxxxxxx today!"

They never take into account the loss of stocks de-listed from the S&P 500 ... Catepillar, Dow Corning, GM, etc.

Ben Davis
06-14-2009, 7:04 PM
Yep, it is now GMGMQ.PK, according to yahoo finance.

They were pulled from the S&P 500 also, which shows how much of a lie those admonitions are that say "if you only invested in the S&P 500, your $10,000 investment would be worth xxxxxxxxx today!"

They never take into account the loss of stocks de-listed from the S&P 500 ... Catepillar, Dow Corning, GM, etc.
Bunk. What they don't tell you is that all dividends must be reinvested. You effectively multiply the yearly stock performance by the average yield across the index.

You should look up what Einstein had to say about compound interest.

Eddie Watkins
06-14-2009, 10:29 PM
Yeah, that'd be a nice rate of return...

I was just talking to someone a couple days ago who was wishing he'd bought some Ford when it hit bottom. Hindsight.

Ford is still not out of the woods. It is carrying a lot of debt and recently had a new stock offering which diminished the value of existing stock. They have made a pretty good recovery. I sure hope they are able to make it thru this downturn.