GM Shares At 66 Year Low, But You Can Get Some For Free!

Hey, here’s a new and exciting deal. Buy a car; get 100 shares of GM stock. “Join us in jump starting America,” says the sales pitch. Unfortunately, GM’s shares are trading at 66 year low today as a bailout looks doubtful.

From Reuters:

Assuming defeat, GM would have to ‘run on fumes’ until the next Congress and Administration, unless Congress were to reconvene in December to address emergency compromise legislation,” [Barclays Capital analyst Brian] Johnson said in a research note.

So, what do you think? Gonna buy a car to get those free shares?


UPDATE 1-GM shares at 66-yr low amid bailout doubt
[Reuters]
[Jim Coleman Cadillac] ty(Thanks, Dan!)

Comments

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  1. HFC says:

    There’s no way I’m going to buy a Cadillac. If they offered it on all GM models with 0% financing and employee discounts, I might think about it.

    • mzs says:

      @HFC: Too bad you are too blinded to realize that the ’09 CTS-V is basically the best sports sedan ever made and if that is not enough good news it is a bargain in the class.

      • RedwoodFlyer says:

        @mzs: I so badly wanted to strike down your comment…but after looking at some pics, I must say that I’m very impressed. Bravo GM, Bravo!

      • kc2idf says:

        @mzs: This is actually very true, but it leaves out in the cold those of us who might rather buy a fuel-miser. I drive a nine-year-old Geo Prizm. An Aveo might look like an interesting replacement.

        Now, of course, I recognize that an Aveo and a CTS have radically different sticker prices, but how about, say, 50 shares for buying an Aveo?

      • HFC says:

        @mzs: Too bad I’m too POOR to afford a Cadillac. I don’t care how nice or good looking it is, I can’t afford to shell out the money for it. Especially when I put about 40k miles a year on my car.

  2. bsalamon says:

    well, i always wanted a car that runs great for 2-3 years then falls apart.

    • robb9 says:

      @bsalamon:

      Qualify that with some facts.

    • B says:

      @bsalamon: 2-3 years? At least the car will outlast the stock.

      • bsalamon says:

        @B: @B: @robb9: sorry, I was thinking about ford for some odd reason. my dream car is a cadillac…maybe i should read a little more carefully next time. sorry

        • NinjaMarion says:

          @bsalamon: Yup, I love me a Caddy, especially the old school 80’s and 90’s ones. We had two 80’s ones, both Sedan DeVille’s, one beige and an 83 and a light blue 84. Those things were freaking tanks. Sure, they had some issues here and there, but damn if those things weren’t solidly built. Really, just about any car from 15 or more years ago woulda been awesomely solid and pretty reliable, but I’ve had a soft spot for Cadillac’s ever since those two my grampa owned.

    • everfade says:

      @bsalamon: 2-3 years? Try 1-2. My bf always purchased either Ford, Chevy or GM, however he always had problems and the last straw was his Monte Carlo. After that one started giving him transmission trouble at 35ooo miles he traded it in on a new Hyundai and has never looked back.

    • mtarget says:

      @bsalamon: My Saturn has been motoring along for the last 12 years virtually problem free. I’ll buy another one when this one wears out.

      • supercereal says:

        @mtarget: I think the moral of the story is that the better you take care of a car, the longer it will last, regardless of brand. My friend has a 95′ Ford that’s still plenty drivable, whereas my parents have had problems with new Toyotas.

        Disclaimer: I own a Honda and am in no rush to switch to an American owned car company. :)

      • djsyndrome says:

        @mtarget: I wouldn’t. The Saturn of 1996 is a completely different animal from the Saturn of 2008.

      • lpranal says:

        @mtarget: from one very happy Saturn to another- don’t buy a new saturn. the new “saturn” is a shell of its former self- while some of the saturn marketing hype is still there (no haggle pricing etc.) the cars are definitely NOT the same. All of the new saturns all share a common platform – in the case of the s-series, which if you have a 12-year-old saturn you’re almost definitely talking about- the Ion = Chevy cobalt = pontiac g5 = not as good as the s-series.

        What saturn had set out to do with the s-series- compete with small, reliable, fuel efficient imports- they had absolutely accomplished. The only problem- the cars just weren’t profitable.

        They put themselves 5 years behind honda / toyota with the delta platform (ion / cobalt /g5). The car is less reliable, feels cheaper (don’t know how they managed to do that) and gets worse mileage than the S-series. Hang on to your car as long as you can, it’s a dying breed – a quality, fuel-efficient american car that can compete with small imports.

    • sprocket79 says:

      @bsalamon: I’m at 93k miles on my 2000 Cavalier. I’ve never had a major problem with it, but I do take care of it. I take it in for scheduled oil changes and maintenance. Perhaps the problem in your case could be user error? :)

  3. OletheaEurystheus says:

    I dont understand where the bailout seems unlikely comment came from… maybe this year, but GM has enough capital to make it to Jan at which point the Obama administration will infuse the capital.

    Even if they do go bankrupt, its likely they wont fold before then.

    • Corporate_guy says:

      @OletheaEurystheus: I hope not. delaying bankruptcy with a “loan” means we will never get paid back. It would be reckless to give them the money until after they declare bankruptcy. I would also hope they would require a complete change of management.

  4. lawnmowerdeth says:

    I’m just worried that I’ll lose the warranty on my Solstice if they go under!

    • robb9 says:

      @lawnmowerdeth:

      You won’t.

      • Bladefist says:

        @robb9: I’ve been reading your comments. And you have pose some good arguments in other articles. But at the end of the day, GM is just another company. Sure they employee a lot of people, but so do other companies.

        I don’t see why we cant let them fail? Everyone knows unions are horrible for companies. They make demands that are outrageous, and strike if they dont get what they want. Why should I bail GM out, so they can keep paying the union people way too much to be the statitically least productive people in America.

        Along with GMs other mistakes? Let them fire Chapter 11. They’ll come back. People will be laid off, and my prayers are with them, but thats the way the world works. Since when does America bail out public companies? Just because we started down this road, doesn’t mean we cant pull off the highway.

        Have you seen how the bail outs have worked for the banks? Oh wait, you couldn’t have, because it hasn’t. And I know its been relatively a short amount of time, but they acted as if the money was need urgently, and we would see an improvement.

        We were also promised by the bank bailout, to get a return on our invenstment. I trust that is possible. But with GM? If they keep their lousy unions and their lousy R&D, we will never get a return.

        Ditch the unions, be self sufficient, be innovative, and they’ll fix their own problems. Don’t come to me.

        • B says:

          @Bladefist: The best argument I’ve heard for keeping the automakers from going under is in the next 5-10 years there’s going to be a huge demand for autos in China/India/other developing nations, and if there are no domestic auto makers, we’re going to miss out on that market.

          • god_forbids says:

            @B: Surely you must be joking. Cars from domestic producers in India and China are produced for one to two thousand dollars and sell for two to three thousand dollars and up. How can you possibly imagine that American auto companies (with $6,000 overhead per car from employee comp and benefits alone) would be able to sell anything over there?

            • humphrmi says:

              @god_forbids: There’s a lot to be said for safe cars too, and while your comp and benefits numbers are likely correct, I suspect that the one to two thousand dollar production price would be hard to match just based on safety design and equipment costs alone.

            • Bad Juju says:

              @god_forbids: Not if they BUILD them there. They already sell a crapton of Buicks in China. Think they’re building those in Ohio?

        • TouchMyMonkey says:

          @Bladefist: Don’t blame the UAW for management’s epic fail. Me, I’m waiting for GM to go below $2 a share, which ought to be any day now. Sooner or later, they gotta start firing some suits, and then I’ll be in the chips.

      • starrion says:

        @robb9:

        How do you figure?
        If GM goes bankrupt, then their suppliers go bankrupt.

        Even if they offer warranty reimbursement through some insurance scheme, loss of the supplier base means no new parts.

        I think concern is justified.

        • Bladefist says:

          @starrion: Next we bail out the warranty providers and the commercial insurance industry.

          They buy tons of TP, so after that we will bail out Charmin. Charmin employees make TP from paper, and now the paper industry is on the fritz, so we’ll bail out Big Paper.

          • TouchMyMonkey says:

            @Bladefist: FWIW, I sort of agree with you on the bailout. Why just throw bales of money out of helicopters? It’s just plain stupid. If we are going to have our government do something, there should be strings attached. No golden parachutes, no bonuses, no trips to Tahiti for “conferences”, and no dividends until the last penny is repaid.

            And they’d better have a plan. Lee Iococca had a plan when he went to the government with his hat in his hand almost 30 years ago.

        • humphrmi says:

          @starrion: Even if their suppliers go bankrupt, I would bet that parts are still available. For one thing, the intellectual property around the manufacturing of those parts are an asset, and in bankruptcy someone would likely buy that asset, and start making those parts in absence of the now bankrupt supplier. It doesn’t really matter if the supplier goes bankrupt, as long as there is a market (buyer) for the parts and profit to be made, someone else (who is more efficient or better funded) will make them.

          • acarr260 says:

            @humphrmi: Plus, the American automakers always own the tooling for parts for their cars. So even if the supplier and the automaker go bankrupt, those tooling assets will still be available. That beind said, replacement parts would probably double in cost and I would expect that any factory warranty would be void.

            • humphrmi says:

              @acarr260: Agreed, prices would go up, dramatically, for everyone. But I don’t know if that would in and of itself void warranties, if the companies that offer the warranties survive. Ultimately, some entity would have to survive even liquidation, and that entity would likely be on the hook for warranties.

              The failure of even one North American auto manufacturer would be devastating for all three, and even the foreign manufacturers, who all share parts suppliers in the US.

              But on the other hand, there is plenty of evidence that we have too much production capacity, and while painful, a failure of one fifth of that capacity (about the size of GM’s market share) would likely bring us back to equilibrium. Again, obviously, there is no denying that that would be a very painful move back to equilibrium though.

  5. idip says:

    Hmm… seems pretty bad when companies are just throwing out shares of stock.

    Makes it seem like the shares are so WORTHLESS that they have to give them away becuase no one is buying.

  6. Bladefist says:

    Oh, and I work in a blue collar company, that doesn’t have a union. We have the most skilled and most productive people, and that allows us to make enough money to pay them above and beyond what our competitors can pay their employees. It works.

  7. shorty63136 says:

    Hm…giving away stock and then using the words “jump start” in a marketing campaign in regards to cars you want people to buy?

    2 more strikes, GM. 2 more.

  8. everfade says:

    “we’re so proud of selling the best America has to offer” – and when it comes to autos that’s not saying much.

  9. rpm773 says:

    That ad campaign is sad. I almost think GM would get more mileage out of it if it was tongue-in-cheek.

    “‘Hey, we’ll even throw in some *valuable* GM stock on a purchase of a new car!’ “

    GM didn’t cause all of its problems, but I always thought it and and the rest of the industry somewhat played Americans for fools.

  10. Snarkysnake says:

    I won’t comment on the quality of GM’s shitty cars here,but as for the stock…

    If you are thinking about buying GM stock right now because it is “cheap”,you are not really making an investment. It’s more like buying a lottery ticket ,with about the same odds. See , years of mismanagement and failing to stay in touch with customers needs and wants have wrecked this company beyond repair.GM has refused to design and build a safe , efficient,affordable small car that would make first time customers life long customers (think Honda Civic). GM management thinks that if they build a shitty,but adequate entry level vehicle,you’ll want to trade up into what they want to sell and they’ll make lots more money. This hasn’t worked out so well.
    GM also thinks that they can have a fleet of corporate planes,an executive dining room,large bonuses for executives and then ask the unions and the taxpayers to sacrifice many billions of dollars to save the company.

    So,if you think that buying GM stock is a good investment because the price is low,you probably bought a Chevy cobalt because it was cheaper than a Corolla…

    • putermcgee says:

      @Snarkysnake: i was going to make a crack about just buying the stock myself and not getting stuck with a ton of debt and a cobalt…but yeah, what the guy above said.

  11. jchabotte says:

    I’ll just wait it out until the inevitable: “Buy 100 shares of GM Stock, we’ll throw in a free car”

  12. Chols says:

    I’ve owned 4 cars in my lifetime. 2 of them were Hondas, the other two a Pontiac and a Nissan.

    I loved my first Prelude, and I love the Civic I have now. I’ll have it until the wheels fall off. Then I’ll put some more on and keep driving it.

    It’s sad to see them go because it will put a lot of people out of work, but it happens.

  13. Trai_Dep says:

    I’d love to show up in a GM showroom, take the test drive, dangle my credit report in their faces, then ask in an innocent voice, “Err, is there any way I can get 100 shares of Toyota stock instead? Pleeeease?”

    • rpm773 says:

      @Trai_Dep: “Err, is there any way I can get 100 shares of Toyota stock instead? Pleeeease?

      “No, but we do have a 1990 Geo Prizm out in the yard which has a little Toyota in it. It’s worth about the same as 100 shares of GM stock. Wait…make that 115 shares now.”

  14. hoppychris says:

    So have they made the stock certificates into small squares and put them on a roll yet?

    In a year they could be worth as much as the warranty on your car, but you’d still be able to wipe with them.

  15. ThickSkinned says:

    click, click, click…Hear that? It’s the economic rollercoaster coming to the top of another huge drop.

    Too bad there is no regulation on credit default swaps. It would be real interesting to know how much in CDS’s have been taken out on GM. When/If they completely go out of business, the companies issuing the GM CDS’s are going to be screwed. While I vehemently disagree with the government bailouts, this one is necessary to prevent a disaster that will make the October ’08 fiasco seem like misplacing a $20 bill. If it ever does pass, let’s hope they actually put some stipulations in on how the money has to be spent. I’m looking at you two, Paulson and Bernanke.

  16. jcargill says:

    Has anyone blamed the union for this idiocy yet?

  17. dragonfire81 says:

    Getting stock as part of a vehicle purchase does not constitute “Free”

  18. kryptonn says:

    I just don’t see the pt in bailing them out. The bailout will undoubtedly save jobs in the short-term, but will the big 3 use the bailout to create a business model that actually works?! Will they provide vehicles that American’s actually want to drive? Personally, I believe we will we see a string of crappy products over the next few yrs till the big 3 need another helping hand. We cannot throw a $25 billion bandaid on detroit and think all will be well.

  19. blackmage439 says:

    Does anyone remember the “Angry Dad” episode of the Simpsons where Bart posts his cartoons on some website, and when he went to their office, they had their stock on rolls of toilet paper?

  20. weakdome says:

    hahahaha this should read “Buy a worthless car: Get some worthless stock!”

  21. consumerd says:

    I have a 2005 avalanche that has 80k on it currently and no problems. The only thing I have had to put on it so far was tires. I had one factory recall (something about the backseat seatbelt thing) and that’s the only major mechanical problems I have had with that truck. That truck has been rock solid so far. Short of the scratches I keep putting on it (damn me), it’s been a really strong truck. The 4WD has came in handy in a few winters around here now.

    Ironically I traded in a poor ford escape to get that truck and that was the best trade I made!

    The ford Escape I had gave me more problems than what it was worth.

  22. ilovemom says:

    At the current trading price of 2.63 that’s a whopping $263 dollar giveaway. Pathetic.

    • altryan says:

      @ilovemom: Yes its worth $263 today… but if the company turns around and trades at $10 a share like it was in August/September, than it would be worth $1000, and if it trades at its last year price of $30/share, it will be worth $3000.

      The focus is not on what kind of cash you would make for selling immediatly, but on what you could make if the company ever manages to pull itself out of its hole.

      So, not pathetic, but a rather cheap investment if you were planning on purchasing an automobile in the near future. They want to reward customers for having confidence in their company.

  23. LJKelley says:

    I hate the anti-union talk. The fact is UAW has constantly said they are willing to negotiate but it must be a 2 way street. The stupid GM CEO getting a 14 million raise is not a 2 way street. The whole point of a union is that if one person takes a cut, everyone takes a cut.

    I for example think a Banking Union would have prevented the Mortgage Crisis. Fact is staff was overworked and told to do fraud/shady loans. If they complained they were fired. This was especially true at Countrywide and I witnessed someone I know get fired from Countrywide due to his refusal to do shady loans. A Union would have prevented this and allowed staff to strike in return for no mandatory overtime which led to tired workers unable to always catch mistakes which plaid further into Loan Officers and CEOs ideas of closing loans so fast you could never tell if they were a good idea. All for quick BONUSES (just like GM CEO is taking).

  24. flipx says:

    Was into my Toyota dealer today salesman was saying that Toyota is putting out as many cars as GM and how do you think the quality is going. Still high but starting to show recalls with in the first few months on new models and that never happened a few years ago. He calmed that to get a great car go to market were there is not a high volume of sales. May be that will be GM, if they would cut there product line by 2/3 and do it right they might make it.

  25. springboks says:

    Let’s see GM shares have been trading at about $2.60 today. $260 for 100 GM Shares. They may as well give a free ipod with the sale of every car.

  26. Coles_Law says:

    With their current financial situation, they might as well call this promotion “Saved by Zero” as well.

  27. Ben_Q2 says:

    Do you get this if you buy a used GM?

  28. Anonymous says:

    If GM goes into bankruptcy (including a Chapter 11), the stock comes behind everything and is virtually guaranteed to be worthless. It would be better to wait until after the bankruptcy filing and then get stock with a priority.

  29. sinfonian94 says:

    @bsalamon: That’s funny, I bought my 1995 Cadillac SLS for $3850 in 2004 with 128,000 miles on it, and drove it until late 2007 and 207,000 miles. And if I wanted to drop $1500 on the transmission, I’d probably get at least another 10-20 thousand miles off of the engine. So much for your 2-3 years.

  30. sinfonian94 says:

    @Bladefist: Man… the average of $27 an hour for an auto builder ($56160/yr) is totally outra….. Oh, wait! That would be middle class. Auto workers don’t make “outrageous” salaries or demands. I don’t think 56 grand a year is outrageous for hard labor building a quality product. And health insurance and vacation!!!! OMG, how outrageous.
    The problems faced by GM and Ford have more to do with mismanagement. The very same companies that complain about CAFE standards have affordable cars that get 50mpg for sale in Europe. There are auto buyers in the US clamoring for Euro spec Ford Focuses instead of the US model. Any competent managers would have had those cars for sale in the US years ago.
    But, oh wait, it’s all the evil unions.

  31. sinfonian94 says:

    darn, the reply went to the wrong segment. Must be the unions’ fault.

  32. sinfonian94 says:

    @Bladefist:
    Man… the average of $27 an hour for an auto builder ($56160/yr) is totally outra….. Oh, wait! That would be middle class. Auto workers don’t make “outrageous” salaries or demands. I don’t think 56 grand a year is outrageous for hard labor building a quality product. And health insurance and vacation!!!! OMG, how outrageous.
    The problems faced by GM and Ford have more to do with mismanagement. The very same companies that complain about CAFE standards have affordable cars that get 50mpg for sale in Europe. There are auto buyers in the US clamoring for Euro spec Ford Focuses instead of the US model. Any competent managers would have had those cars for sale in the US years ago.
    But, oh wait, it’s all the evil unions.

    • humphrmi says:

      @sinfonian94: Well, to be honest:

      - They get health coverage that is quite likely the best in the world… they generally can visit any doctor for any reason and pay no co-payments or deductables, for life.

      - They get a defined benefit pension that pays based on their ending salary regardless of the performance of the markets.

      - To get all this, all they need is a high school diploma and a clean criminal record. Full training is provided on the job at no cost.

      I’m not saying that they are overcompensated, I’m just pointing out that they get a lot from their job that most people don’t get.

  33. Anonymous says:

    I have owned 3 honda, and F150, an avalanche, an audi A6, a vw, 3 toyotas, 2 nissans, a bmw, a fiat, a chrysler, a volvo, and two nissan’s. Yes, I am old. I have rented a bazillion cars. While it’s true that American auto makers have come a long way (’81 Olds Omega anyone?) the fact is that the cars are very overpriced. In the early 90’s I looked at a Mitsubishi Montero and a Dodge Raider – the EXACT same SUV. The Japanese car was $9900. The Dodge was $13,900. WHAT?
    A friend called me from California. A 3/4 ton Chevy pickup was $19,000 OFF sticker. That didn’t make him happy, it made him mad, seeing how much the trucks were overpriced, and how much he had wasted over the years.

    My first reaction is, don’t bail them out. If it’s done, they’ll be back, and nothing will change. Or…lend them the money AND then the big 3 should sell any American a car or truck at cost, because it’s our money they took. I wouldn’t consider a Malibu at $30,000+, but I would at $15,000. I just rented one, it was pretty nice. Same with the Taurus X. $36K? Nope. $17,000? A great deal. Also, move the company to South or North Dakota or somewhere similar. They would get a dollars work for a dollars pay, and be away from this attitude that’s killing them, from both management and unions. What do you think?

  34. Meathamper says:

    “We’re so proud of selling the Best America has to offer…”

    Smirk.

  35. Wyndikan says:

    If they would just make cars that last, they wouldn’t be in so much trouble. Serves them right.

  36. moore850 says:

    In another month or so, that will be “buy this car, get 100 sheets of toilet paper for free!”