GM is in a down trend right now. The company's plan for restructuring failed to be approved by the Obama administration. They will have 60 more days of federal funding before they must present their revised plan. This resulted in an over 25% drop in the price of their stock Monday March 30. The new interim CEO, Fritz Henderson, is prepared to work out a deal in bankrupcy court if it comes to that.
I believe that the stock will continue to drop over the next several days as it has continued to drop after hours. If the company declares bankruptcy in 60 days, I think it is safe to say we will see a 52 week low. However, if GM receives approval of their revised restructure, they will continue to receive funding and easy the worries of investors and send prices through the roof. Even though the rejection of the plan may seem troubling, I would advise against selling because it has gone down too far at this point and there is still hope for a rebound. I would advise against buying because the company may declare bankruptcy this quarter. It would be safest to wait a little longer until we are able to see if GM can meet the 60 day deadline.
Verdict: HOLD
(1 Month Price Chart for GM)
Sources:
http://www.google.com/finance?hl=en&q=GM&um=1&ie=UTF-8&sa=N&tab=we
http://www.forbes.com/2009/03/30/briefing-americas-outlook-markets-economy-housing.html
I believe that the stock will continue to drop over the next several days as it has continued to drop after hours. If the company declares bankruptcy in 60 days, I think it is safe to say we will see a 52 week low. However, if GM receives approval of their revised restructure, they will continue to receive funding and easy the worries of investors and send prices through the roof. Even though the rejection of the plan may seem troubling, I would advise against selling because it has gone down too far at this point and there is still hope for a rebound. I would advise against buying because the company may declare bankruptcy this quarter. It would be safest to wait a little longer until we are able to see if GM can meet the 60 day deadline.
Verdict: HOLD
(1 Month Price Chart for GM)
Sources:
http://www.google.com/finance?hl=en&q=GM&um=1&ie=UTF-8&sa=N&tab=we
http://www.forbes.com/2009/03/30/briefing-americas-outlook-markets-economy-housing.html
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