FORTUNE MAGAZINE MotorWorld by Alex Taylor III

GM plunges 31% as outlook dims
GM and Ford face credit downgrades after new report projects U.S. auto sales will hit recession levels this year; Ford slides nearly 22%.
By Alex Taylor III, senior editor
Last Updated: October 10, 2008: 10:51 AM ET

NEW YORK (Fortune) -- Investors cast a shocking vote of no confidence in the future of U.S. automakers Thursday.

After dropping sharply early in the day, GM (GM, Fortune 500) shares hit their lowest point since 1950, closing down 31% to $4.76 a share. Ford (F, Fortune 500) fell nearly 22% to $2.08. On Friday, GM seesawed like the broader market and was up more than 3% in mid-morning trading. Ford rose 12%.

A flurry of bad news was to blame for Thursday's selloff, of which the latest was a declaration by ratings agency Standard & Poor's that it was putting GM and Ford on credit watch negative "because of the rapidly weakening state of most global auto markets" and weak capital market conditions.

GM said in a statement Friday that bankruptcy protection was "not an option."

But the stock plunge effectively puts both companies on death watch, and it's easy to see why. The ratings warnings followed a new report by Global Insight that shows U.S. auto sales hitting recession levels this year - and then sinking lower in 2009.

"We won't get back to where we were in 2006 until 2013," said George Magliano, director of forecasting for North America for Global Insight. The economic forecasting and consulting firm based outside Boston is forecasting sales of 13.8 million units this year and only 13.4 million in 2009, compared with 16.1 million last year....

complete article:
http://money.cnn.com/2008/10/09/news/companies/taylor_death_watch.fortune/index.htm

What, you picked up a 2-week old newspaper???!!
;)
WOT

But stock charts don't lie. It's getting worse!

http://finance.yahoo.com/echarts?s=BGM#chart2:symbol=bgm;range=1m;indicator =volume;charttype=line;crosshair=on;ohlcvalues=0;l ogscale=on;source=undefined

Whatever you say
But in this case OLD NEWS is GOOD NEWS lol
As 2 days ago (on Friday) I sold a small portion of the GM shares I bought on Oct 10 (when IMO it "bottomed out") at 4.89 for 6.08 for a quick 25% profit. (If I would have waited a bit I could have sold it a 6.72)

But I'll hang onto the rest for now -thank you very much...
WOT

Yeah, It was lower two weeks ago but it surely does not look good. Right now it's 5.95.

But stocks don't lie. It's getting worse!

of course stocks lie... they are only the reflection of the perceived value of the stock to the stock market traders.

The stock market traders are far from all knowing... they make educated guesses at best.

Besides even if the stock dropped to $0.01 there are plenty of legal actions they can take to stay open while continuing to operate at a loss... and the U.S. government can always just pass another multi-billion dollar bail out to add to the $25 Billion they are already getting... and the $810 Billion the banks are getting... the 3 are too big to go under fast... especially with the amount of lobbyists pull they have invested in.

of course stocks lie... they are only the reflection of the perceived value of the stock to the stock market traders.

The stock market traders are far from all knowing... they make educated guesses at best.

Besides even if the stock dropped to $0.01 there are plenty of legal actions they can take to stay open while continuing to operate at a loss... and the U.S. government can always just pass another multi-billion dollar bail out to add to the $25 Billion they are already getting... and the $810 Billion the banks are getting... the 3 are too big to go under fast... especially with the amount of lobbyists pull they have invested in.

Of course, the stock value is not its true worth, but speculative worth, and in most cases they don't equal.

So let me put it in a more technical way. The historical stock data don't lie (unless someone hacked into the system and changed the numbers). If you bought your stock at $6.00, it was at $6.00 at that time and place of transaction, and the overall average is recorded in the stock charts. You can only speculate about the collective speculations about the trend, and still it doesn't paint a nice picture for GM.

Why wouldn't someone be checking Ford's pulse, as opposed to GM's? I don't see Ford making any substantive moves in the area of alternative fuel vehicles.

There will only be 1 major US auto company that survives. I would not place bets on which.

As for the stock price, in the short run the stock price of a company can be wrong but in the long run the price reflects the value of a company.

Why wouldn't someone be checking Ford's pulse, as opposed to GM's? I don't see Ford making any substantive moves in the area of alternative fuel vehicles.

Ford is like all other new vehicle projects except for the Volt, they are very quiet about upcoming vehicles and usually only come out with a production concept a year before production.

Ford relies on their acquired brands to do R&D (primarily Volvo and Mazda). We know they are working on an EREV through Mazda. They have a HFC/BEV plug-in Edge and have had HFC Foci for about 7 years now (FreedomCar, a joint project between FoMoCo, GM, and Chrysler).

Ford won't let the public see their production model until the 2010 or 2011 NAIAS. I know they will release one, though.

Ford won't let the public see their production model until the 2010 or 2011 NAIAS. I know they will release one, though.

In normal economic times, this isn't a bad policy. Right now, for them, it's really, really dumb. Investors and the folks over on Wall St. are thinking that Ford is all washed up and out of new ideas to attract buyers. They really don't have until 2010 to let people know that's not true. If they want any hope of survival, they need to be somewhat transparent now. Give investors like Kirkorian a reason not to just sell it all now.