Cramer: Trading General Motors

General Motors Chairman and CEO Rick Wagoner has said his struggling company has plenty of liquidity. But the way Cramer sees it, that liquidity would come at a cost.

The CEO’s only option is to cut GM’s dividend, Cramer said, "and then bury your common stock with preferred."

Stop Trading, Listen to Cramer!
Stop Trading, Listen to Cramer!   

Erin Burnett suggested a merger of GM with Ford or Chrysler as a possibility since such a move would streamline the companies and there’d be no anti-trust concerns from Washington.

Cramer urged investors looking for a play here to remember that “the issue again is the common stock," he said. "That's not the right instrument to be able to be involved in these."

"If I were in my hedge fund business, I would be selling the common stock, or at least trying to set it up for when the preferred piece is issued,” Cramer continued. “Maybe if I really like GM, buy that then."

Lastly, Cramer reiterated his call on Research in Motion despite the stock’s tumble following 1Q earnings Thursday.


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