Question

Use the GM’s Bankruptcy discussion thread to discuss the fall of the largest automobile manufacturer in the United States.

When GM declared bankruptcy what happened to their shares of common stock? Could you purchase shares of GM stock when they were in bankruptcy? What was their stock value prior to declaring bankruptcy and what is their stock trading at now that they are out of bankruptcy?

Answer 1

General Motors Bankruptcy- GM used to be a giant in Automobile sector in USA. It used to have more than 50% market share in car market in USA but now very less. Due to recession in Auto market in USA, GM's sales went down so as the revenues and labor and cost increased. GM filed for bankruptcy very soon Its assets were sold and amount was paid back to creditors. After the bankruptcy, GM was removed from DJIA index as its share fell down drastically.

GM's stock price when declaring Bankruptcy- It touched the lowest level of $1 on May 2009. It also went down below $1 and this happened first time after 1933 when GM declared the chapter 11 Bankruptcy. All investors sold their holding of GM's stock. I could have bought its share as it was at very low price. GM fundamentally was strong.

GM's stock price was at $93 in 2000 when there was boom in US Auto market.

GM's current share price- It is $44.07 (as on January 12, 2018)