OT: Any body own GM bonds here?

Gun guru · May 6, 2009

I got a notice from GM yesterday that says in short "we want to give you 1/10 of your value of your bonds with common stock, so we can avoid bankruptcy" I am sending in my "HEII NO" Statement in a day or two.

GM basically wants to default on $27,000,000,000 in notes so that they can get away with paying lucrative severance packages to the employees and executives and they still dont want to stand up to the UAW.

Traditional Farmer · May 6, 2009

It'll probably end up like Chrysler where the external_link Gang decided who got what.UAW got the most even though they had nothing invested.And the TARP $$$ the taxpayers were going to make so much on...well thats all history and the US Taxpayer gets $0.But anyone who hadn't dumped their GM and Chrysler holdings long before now apparently can't read the 20' high letters on the wall.

MarkB_MI · May 6, 2009

G-G,

You are not alone in your decision to turn down GM's offer to its bondholders. You do realize, of course, that if GM goes into Chapter 11 you might end up with nothing.

Gun guru · May 6, 2009

Actually I talked to my broker and he is quite sure that a bankruptcy judge will at least rule that GM is to pay a minimum of 25% of the face value of the bonds, SO----I would rather hold out for a year or so and let a judge decide rather then get $1000 worth of junk GM common stock (which is what is being offered to me)
My broker says that the Retail bond holders (which is what I am) will get about 35% of face value.
Think about it this way---GM took $27 billion and used it to finance their company, okay fine....But they pi$$ed it away on running their business like crap and now they want to give the bondholders 1/10 of what they are supposed to receive.
The current common stock holders will end up with nothing, by next month.

Anonymous-0 · May 6, 2009

Freg GM and there crappy modernday products! I bought Ford stock a couple months back, at 2.84 a share, now im getting a 114% return, as it closed today at $6.26 Whats GM at $1.56....LOL

Anonymous-0 · May 6, 2009

Opps, sorry GM closed at $1.62 today

Glad I dont own any shares.

fixerupper · May 6, 2009

You hit the Ford stock right. I bought Ford at a little over $10 thinking it wouldn't go any lower. Then I bought again for $4 and now you say you bought for $2.86. I'm jealous! LOL. Jim

Anonymous-0 · May 6, 2009

Ahh,,,,,, That happens to all of us Jim, you cant time the market, you only get lucky. I bought GE last september at $24 or so, no way GE would get any lower?.....right???? ya !!!!got down to $6 or so this winter, now its $13. LOL J

Spook · May 6, 2009

I kind of doubt that 25% figure. Corporate bonds are not secured. In bankruptcy, the bondholders come ahead of stockholder's but that may not mean much. I know that a lot of GM's equipment is leased, and the stuff is owned by banks and financial companies. And real estate often has a mortgage attached to it, which is secured. I would be surprised if bondholders in bankruptcy averaged 10%. ( in all bankruptcies ). My experience with brokers is they tell you 2 things: What will make them money, and what will keep you giving them money.

Anonymous-0 · May 7, 2009

I own some of the bonds and will refuse their offer. I also realize that a lot of UAW workers own stock and bonds and that puts them in the same boat as us. Reminds me of Enrom.

Anonymous-0 · May 7, 2009

No matter what the future of all car companies is dependent on the availability of crude oil. The party in control right now does not support the exploration or drilling for more crude but rather base their future on Ethanol, wind, and Solar power. It is a noble gesture but seems it won't work near term. Here we go again.

Bob M · May 7, 2009

Not just the bondholders are being screwed. I worked for GM for about 10 years in the 1970's. Over that time I accumulated several hundred shares of GM stock thru the SSPP (salaried employee stock purchase plan). My aggregate cost per share worked out to about $48/share.

Last fall, when it became apparent that GM is toast I sold all my GM stock. I got $3/share for it (this morning it's $1.66 - I coulda done worse).

The only (modest) upside is I now have capital losses I can claim on my tax returns for the next 20 years or so.

Grrrrr......

dhermesc · May 7, 2009

I agree.

The secured creditors get paid first, if GM is are like Chrysler there isn't even enough to cover them. Barry tried to get the secured creditors to back off and give half of what they had coming to the UAW - at least some of them told him to stuff it.

Bret4207 · May 7, 2009

This is what the Gov't gave the Chrysler bond holders- CHANGE!!!

dhermesc · May 7, 2009

I doubt it will work in the long term either. The country has several hundred year supply of coal, but that's not an option. We could have a couple hundred nuclear plants but that's not an option either.

But wind power (that only 18% efficent) and removes thousands of acres of farm land from production (remember the starving people in Africa and using your food for fuel is stupid).

Solar power sounds good until you run the numbers and the amount of energy required to build panels compared to their return - closer to a net loss than the alcohol claims.

OT: Any body own GM bonds here?

Gun guru

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Anonymous-0

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