Automotive News reports overnight that GM will issue sixty billion (60,000,000,000) new shares of stock that they'll parcel out to the bondholders, gummint, UAW and give out as tickets to be redeemed for prizes at Chuck E. Cheese (well maybe all of the above except the last ; -).
So how much will GM shares be worth this morning? They closed at $1.85 yesterday. GM's current market cap is $1.13B so it looks like they're expanding equity by about 100 times current. Definitely penny stock territory.
Hmmmmm, I'll need to double check calculations after a full dosage of coffee, but if you haven't dumped your GM stock yet - it may be too late.
Wednesday, May 6, 2009
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