30 Investors Bound to Lose Big on GM

If General Motors (GM) declares bankruptcy, some of its investors—including bondholders, other secured lenders, and the U.S. government—are likely to get a portion of their money back. But stockholders, with virtually no protections, will be essentially wiped out.

To gauge who stands to lose the most, we obtained a list of GM's biggest shareholders from research firm Thomson Reuters. In general, the largest shareholders are at risk of losing the most. But losses on stock holdings also depend on the price paid for the stock, compared to the price at which it's sold. And big shareholders typically build their positions over time, buying at a range of prices.

So to simplify our GM losers' list, we determined "notional" losses as if each shareholder had bought all of its current shares on two different dates: the first trading day of 2007 (when GM's shares opened at $30.30) and the first trading day of 2009 (when the shares opened at $3.20).

A theoretical investor who bought 100 shares of GM stock at the beginning of 2007, and held onto them, would be out the entire purchase price, $3,030, if GM declared bankruptcy and the shares got zeroed out. An investor who bought 100 shares on the first day of 2009 would lose $320. Those two scenarios don't capture the exact losses likely to be borne by GM's remaining shareholders. But they represent plausible buy and sell prices over the last several years, when GM shares have ranged from a high of $94 (2000) to lows near $1 (May 2009). That means they provide a basis for comparing the relative exposure of GM shareholders.

Here are GM's 30 biggest shareholders, and the amount they stand to lose according to these two notional scenarios:

Investor	Shares held	Net buyer or seller in 2009?	Notional loss at Jan 1, 2007 price (millions)	Notional loss at Jan 1, 2009 price (millions)
State Street Global Advisors	26,683,717	Seller	808.52	85.39
Vanguard Group, Inc.	23,993,240	Buyer	727.00	76.78
Barclays Global Investors, N.A.	17,746,679	Seller	537.72	56.79
Credit Suisse Securities (USA) LLC	17,489,716	Seller	529.94	55.97
Northern Trust Investments, N.A.	5,360,074	Buyer	162.41	17.15
Mellon Capital Management Corporation	3,337,318	Seller	101.12	10.68
Goldman Sachs & Company, Inc.	3,328,055	Seller	100.84	10.65
TIAA-CREF	2,955,721	Seller	89.56	9.46
Geode Capital Management, L.L.C.	2,844,640	Buyer	86.19	9.10
BNY Mellon Wealth Management	2,742,861	Seller	83.11	8.78
GAMCO Investors, Inc.	2,725,000	Seller	82.57	8.72
Barclays Global Investors (UK) Ltd.	2,690,456	Buyer	81.52	8.61
Morgan Stanley & Co. Inc.	2,525,795	Seller	76.53	8.08
Norges Bank	2,339,307	Buyer	70.88	7.49
Legal & General Investment Management Ltd. (UK)	1,949,461	Seller	59.07	6.24
New York State Common Retirement System	1,869,290	Seller	56.64	5.98
Van Kampen Asset Management Inc.	1,618,820	Seller	49.05	5.18
New York State Teachers' Retirement System	1,609,316	Holding	48.76	5.15
Charles Schwab Investment Management, Inc.	1,571,722	Buyer	47.62	5.03
Aronson + Johnson + Ortiz, L.P.	1,383,045	Seller	41.91	4.43
GAM USA, Inc.	1,258,605	Holding	38.14	4.03
Fox Point Capital Management LLC	1,250,000	Seller	37.88	4.00
Citi Investment Research	1,248,386	Seller	37.83	3.99
BlackRock Investment Management, LLC	1,221,378	Buyer	37.01	3.91
Florida State Board of Administration	1,213,467	Buyer	36.77	3.88
AllianceBernstein L.P.	1,172,738	Buyer	35.53	3.75
RBC Capital Partners	1,141,881	Seller	34.60	3.65
Morgan Stanley Investment Management Inc.	1,104,490	Buyer	33.47	3.53
California Public Employees' Retirement System	1,074,398	Seller	32.55	3.44
GAM Ltd.	1,056,432	Buyer	32.01	3.38

Comments

[Ishortyou:]

wow a lot of them have their hands full with GM...

May 19 12:13 PM

[Jasper M:]

Now filter for just the ones that kept Buying - LOL! What a parade of Folks who Didn't Get the Message!
Vanguard, Northern Trust, Barclay's, Black Rock, Florida.
And New York Teachers on the fence.

May 19 12:35 PM

[PastTense:]

Look at the biggest one on your list: State Street Global Advisors: Will they lose anything? I doubt it. Instead the hundreds of thousands of holders of the DIA (Dow Diamond ETF) and other ETFs they offer will be the ones to lose. Similarly for the other mutual fund or ETF groups on the list.

May 19 01:39 PM

[GM_Bondholder:]

The offer to the UAW. 20Billion debt = $10 Billion CASH and 39% of the new company.
The offer to the government. $15 Billion debt = 50% of the new company AND half of the debt (7.5 Billion) remains owed.
The offer to the bondholders $27 Billion debt = 10% of the new company.

I'm a bondholder. I was offered 225 shares of the new GM for every $1000 GM owes me. In the fine print, this agreement comes with a 100:1 reverse stock split. This means for every $1000, I get 2.25 shares. If the shares double in value, that puts me at roughly $5 for every $1000 I am owed.

Before anyone villainizes the bondholders for "pushing GM into bankruptcy", realize the offer we are given is neither fair nor equitable. The Fed gets 18x the return per dollar than the bondholders and maintains debts owed to them. The UAW gets 50% of their debt paid in CASH, AND they get more than 10x the return per dollar than the bondholders.

The bondholders stand get pennies, maybe less than one penny per dollar, and they're being chastized for not jumping at the opportunity.

May 19 02:16 PM

[Dodger:]

Bankruptcy or a punitive restructuring...why not a third option? Issue 300 million new shares to bondholders convert the Government to a bondholder. The company with new union concessions should do very well with the Government now in a position to assist the shares to reach a target price of $80.00 per share.

May 19 02:48 PM

[Ichaniklast:]

So . . . how many of the top 30 losers could be paid back with the gift of federal tax dollars going to the union in the form of ownership.

May 19 05:08 PM

[dfalter:]

The list is a bit misleading btw.. because it only contains share holders.. Bond holders (two thirds institutional/funds, one third retail) also lost about 24-26 billion over the past year taking market prices - almody twice the total market capitalisation GM had at the beginning of 2008.

May 19 07:21 PM

[lyingtoours...:]

I was glad when I ditched my Vanguard ROTH IRA when it first dipped below what I had in it.

May 20 10:16 AM

[Gerry Sullivan:]

Is GM really going bankrupt? If they pay off the bonds maturing on June 1, 2009 (about $1 billion outstanding) GM doesn't have another
maturity for 18 months.

These GM bonds ($25 par) trade at $2.50 (Symbol GRM)...if they pay off, it is a 10-1 shot.

May 21 10:22 AM