Browse by Tags
-
Posted
Mar 23 2009, 03:55 AM
by
Douglas McIntyre
Rating:
Money Blog: Top Stocks Blog - MSN Money
Ford (F) is in the best financial health of The Big Three. Its position could improve more, at least temporarily, if its deals to cut debt and reset its contract with the United Auto Workers work well.
But, the No. 2 U.S. car company still faces the fact that Americans aren't buying new cars. Sales for some auto companies are off more than 40%. Total domestic vehicle sales could be only 10 million this year, down from 16 million three years ago.
Ford may find an investor other than the U.S. government, if it needs one as the year moves along. According to the Financial Times, Abu Dhabi-based Aabar Investments will spend $2.7 billion for a 9.1% stake in Daimler, becoming its largest shareholder "as the company battles against the worst industry crisis in decades."
Read More...
-
Posted
May 04 2009, 01:04 PM
by
Anthony Mirhaydari
Rating:
Money Blog: Top Stocks Blog - MSN Money
Debt investors are turning bullish and providing support to the continuing stock market rally. Surprisingly, the catalyst may be the Chrysler bankruptcy filing.
According to WJB Capital analyst Brian Reynolds, the strength of the rally depended on continued buying of the debt of beaten-down banks like Citigroup (C) and Bank of America (BAC). When the non-TARP backed hedge funds resisted the government, and forced Chrysler into Chapter 11, an intense flurry of buying began. Reynolds believes that credit buyers are celebrating the fact that these funds stood up for debt holder rights and "wrecked the government's plan."
As an example, an issue from auto financier GMAC (GJM) that matures in 2031 was trading around 40 cents on the dollar last week. Now, it's trading at over 60 cents -- a gain of 50% in just a few days. These kinds of returns are rare for stocks; and even rarer for the traditionally snoozy fixed-income sector. This has parallels to the early days of the Clinton administration.
Read More...
-
Posted
Jun 01 2009, 04:35 PM
by
Catherine Holahan
Rating:
Money Blog: Top Stocks Blog - MSN Money
 General Motors' (GM) long-anticipated bankruptcy announcement on Monday didn't send investors running from the markets. If anything, they responded with relief to the news that GM would file for Chapter 11. The Dow actually rose 221 points as the storied automaker wiped out shareholders and erased much of the $172 billion it owed creditors.
But GM's bankruptcy could yet send the rallying market into reverse.
Though the $30 billion in taxpayer money granted by the Obama administration saved GM from liquidation, it didn't solve the automaker's two main problems: too much production, too few buyers. To address those, GM will lay off tens of thousands of employees in the next 30 to 60 days and cause hundreds of thousands more to lose their jobs. Those layoffs, in turn, will likely fuel increases in weekly unemployment claims -- dragging down the economy and potentially delaying any 2009 recovery.
Read More...
-
Posted
Aug 07 2009, 03:54 AM
by
Douglas McIntyre
Rating:
Money Blog: Top Stocks Blog - MSN Money
GM says it will sell 1.4 million cars in China this year. It sold about 180,000 in the US in July. The critical difference between its costs in the two markets is that many of GM’s Chinese vehicles are made in facilities owned by joint ventures with local car companies. Others are produced in manufacturing facilities with low labor costs. And, GM’s sales are growing in China and dropping in the US.
GM’s expenses in it home market may be falling because it has gone through Chapter 11. Unfortunately, the firm’s sales in its home market were down about 20% last month, so its restructuring cost improvements may end up doing little good.
The No.1 US auto company might be better off setting up joint ventures with other large car companies with factories in America to produce its vehicles. Ford (F), Toyota (TM), and Chrysler already have substantial manufacturing capacity some of which is underutilized.
Read More...
-
Posted
Sep 01 2009, 09:49 AM
by
Kim Peterson
Rating:
Money Blog: Top Stocks Blog - MSN Money
 Don't be fooled by the headlines. Yes, the cash-for-clunkers program helped Ford (F) boost sales a remarkable 17% in August from a year ago. It was the first time since 2006 that sales went up for two months straight, The New York Times reports.
For a brief few weeks, the auto industry sprang back to life. People flooded into dealerships, buying cars into the wee hours of the morning and taking advantage of rebates of as much as $4,500. Bing: More on cash-for-clunkers
But as soon as cash-for-clunkers ended, dealerships turned back into ghost towns. “Dealers are saying as soon as the program ended everything stopped dead,” industry consultant John Casesa told Bloomberg. Don't expect next month's sales to be as cheery.
Read More...
-
Posted
Mar 26 2009, 02:51 AM
by
Bernhard Warner and Matthew Yeomans
Rating:
Money Blog: Top Stocks Blog - MSN Money
This post comes from The Big Money.
Apres le deluge of economic ruin, along come new regulations to make sure it never happens again. Treasury Secretary Timothy Geithner will propose a sweeping set of new rules today as he seeks to install greater oversight on risk-taking in financial markets, "pushing for tougher rules on how big companies manage their finances as well as tighter controls on some hedge funds and money-market mutual funds," writes the Wall Street Journal. On the heels of giving more power to the Federal Deposit Insurance Corp., Geithner is expected to advocate a new raft of regulations for large financial firms -- including forcing them to hold more capital reserves -- and handing more power to the Treasury to monitor emerging economic risks. The Treasury plan (subject to congressional approval) would give the government "vast new powers over 'systemically important' banks and other financial institutions that are so big that their collapse would jeopardize the economy as a whole," writes the New York Times.
Read More...
-
Posted
Jun 02 2009, 08:21 AM
by
Minyanville
Rating:
Money Blog: Top Stocks Blog - MSN Money
With General Motors (GMGMQ) Chapter 11 filing, this is a suitable time to discuss what happens to the options when an underlying company declares bankruptcy.
It's traditional for existing shareholders to lose 100% of their investment when a company becomes bankrupt - even when there are assets of value. Stockholders are at the end of the line, and those assets go to others. Think K-Mart: After its bankruptcy, it was suddenly "discovered" that their real estate was worth a great deal of money, and the "new" K-Mart stock soared. The original shareholders were left with nothing.
Call Options Are Kaput
Once bankruptcy is declared, the stock is worthless - and so are all call options. The stock is usually de-listed from the stock exchanges, but continues to trade in the over-the-counter (OTC) market. If you wonder why it trades, or why anyone would pay anything for the shares, those are good questions.
Read More...
-
Posted
May 01 2009, 08:14 AM
by
MSN Editors
Rating:
Money Blog: Top Stocks Blog - MSN Money
This is the latest roundup from ProPublica's Eye on the Bailout blog.
During yesterday’s press conference on Chrysler’s restructuring, President Obama struck a hopeful tone. Except when it came to “a group of investment firms and hedge funds” who, he said, had “decided to hold out for the prospect of an unjustified taxpayer-funded bailout.” He was referring to a group of about 20 Chrysler lenders who had refused to accept the government’s final offer to accept $2.25 billion in cash for $6.9 billion in loans.
To hear the lenders’ side of the story, the U.S. is the bully here, able to push Chrysler’s major lenders, the big U.S. banks on the bailout dole, to accept an unfair outcome.
Read More...
-
Posted
Apr 22 2009, 10:23 AM
by
Kim Peterson
Rating:
Money Blog: Top Stocks Blog - MSN Money
And so it's come to this: General Motors (GM) has decided not to make a $1 billion debt payment due June 1. Why pay a bill like that if you're going into bankruptcy? The other option GM is pursuing -- persuading bondholders to swap debt for equity -- doesn't require a debt payment either. I wonder if the company is simply going to stop paying its bills until something gets worked out? GM has a $28 billion unsecured debt load, the Wall Street Journal reports. Chief Financial Officer Ray Young told reporters that a GM bankruptcy is "probable." And he also said that one of the last-ditch efforts to save the company -- negotiating with the United Auto Workers union on $20 billion in health care obligations -- is on the back burner because the union is preoccupied with Chrysler. Banking stocks slid after the news emerged.
Read More...
-
Posted
May 04 2009, 03:57 AM
by
Douglas McIntyre
Rating:
Money Blog: Top Stocks Blog - MSN Money
When General Motors (GM) was by far the largest car company in the world at the beginning of the decade, it had vast operations in the U.S., Europe, Asia, and Latin America. The bulk of its sales, and profits, during that time came from its domestic business and its significant market share in Europe.
GM’s presence in the U.S. and Europe -- and its reliance on business from those regions -- is coming back to haunt it as the sales of vehicles move down 20% to 30% in those parts of the world. That should be a caution to other car companies, but Fiat is ready to ignore the lesson.
Now that the Italian company has set a deal to take management control of Chrysler and get an equity share of as much as 35% in the American company, it will have the opportunity to be one of the largest marketers of cars in the U.S. It plans to supplement that, if it can, by taking a large stake in Opel, the GM operating unit in Germany. That will overextend Fiat management and put it in a position to suffer a fate similar to GM’s if global car sales do not recover for several years
Read More...
More Posts Next page »
|
