The Presidential Automotive Task Force is meeting today, and there is no shortage of advice for them from the Street.
The one thing everyone agrees on is that the equity in GM is essentially WORTHLESS.
Beyond that, opinions diverge on what should be done. Buckingham Research Group analyst Joseph Amaturo put out an interesting note yesterday arguing that bankruptcy was a realistic alternative.
He too believes GM equity is worthless: he notes that the current share count of 732 m shares could, if shareholders agree to concessions, could balloon to 15 BILLION SHARES (20 times dilution!).
Amaturo says the viability plan does not address the fundamental problems.
The issue is how to:
1) Reduce debt burden
2) Eliminate legacy liabilities
3) Change uncompetitive labor agreements
The presidential Task Force should consider bankruptcy to address these issues, Amaturo says.
There. Someone said it.
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