Quote:
Originally Posted by gtahvit
GM has to know include the loan payback as part of the cost of doing business. Just like they do with any other loan. The Gov. has said over and over again that they don't want to own car companies. So as long as GM pays back the loan they will be fine and out from under that influence
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This isn't exactly true. From what I've read, the government, as well as current bond holders are swapping there current secured senior equity positions (bonds and loans) for stock in the company once it emerges from bankrupcy. GM will not have to pay the government back a loan. The government will have to sell stock once GM is healthy again to recoup the money.
I agree that we should keep politics out of this thread.
I do think it is sad though that the current common shareholders will be wiped out, so that the UAW, the treasury, and the senior bondholders will get a stake in the new company. Under a normal bankrupcy, the common shareholders would usaully get a percentage of the settlement, like 10 cents on the dollar, or a stock swap 50 old shares for 1 new one.
I'm ok playing by the rules, but it seems like the rules keep changing, and it's burning the general public. I made a lot of money in the stock market for a few years, and then lost a large chunk when the SEC stepped in and made rules about short selling financial services and other changes. Its not fun to play a game when the rules are made up as you go along. It's like being in Vegas and you are playing poker and hit a full house. Then the dealer tells you that you were really playing 21, and that you went bust.