Shares of GM have been getting hammered due to growing speculation the beleaguered auto maker is edging closer to filing for bankruptcy.
The stock dropped as low as $1.28 (down 58 cents/more than 30%). At that price, GM shares were trading at their lowest level since April of 1933.
Today's sell off is fueled largely by fears GM executives are more open to the idea of filing for bankruptcy. Going into chapter 11 would wipe out GM shares, and those who still hold GM stock are thinking it's probably better to get something instead of nothing for their investment. GM maintains that it would prefer to restructure the company outside of bankruptcy court, with the assistance of the Federal government.
Speaking of Washington, the President's auto team is meeting this afternoon at the White House. The two men leading the Obama Auto Task Force, Steven Rattner and Ron Bloom, will be briefing cabinet level members of the task force about where things stand with GM and Chrysler. This briefing comes after two weeks of meetings lead by Rattner and Bloom with all the key players in the auto industry, consultants, and bondholders. Rattner and Bloom may not be to a point where they have reached any final recommendations, but this is a good point to update some members of the Obama cabinet including Treasury Secretary Timothy Geithner.
On Monday, Rattner and Bloom head to Detroit for more meetings with auto executives.
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