GM Is The Latest Hot Stock. Yes, That GM

Motors Liquidation Co., a company that exists solely to liquidate worthless assets of the old General Motors, has become the latest plaything of penny stock speculators and other market players, jumping about 40% since the beginning of the year, to 77 cents. Yes, this is going to end very badly for someone.

The SEC, the new GM and others have warned investors that Motors Liquidation isn’t the new GM, but somebody isn’t listening. According to the Financial Times:

Cromwell Coulson, chief executive of the Pink Sheets over-the-counter market where the Motors Liquidation shares trade, identifies three groups that have kept the pot boiling.

With 611m shares outstanding, Motors Liquidation is an obvious target for day traders, who aim to make a quick profit from heavily traded, volatile counters. More than 10m Motors Liquidation shares changed hands on Friday.

Mr Coulson also singles out investors who sold short as GM headed for bankruptcy last year and must now cover their positions.

Finally, some investors, it seems, have yet to get the message that the shares are worth nothing.

“It’s been a challenge to get through to people that these are not shares in the new company,” GM said. Added Coulson: “A market can’t regulate the intelligence of investors.”

Old GM shares make unlikely resurgence [Financial Tims]