Looking into GM's History

CNBC is talking about GM being back to 1929 levels in terms of market cap.

They had a graphic on the screen saying the cap was $4.07 billion in 1929 and is $3.8 billion today (subject to the price hopping around today). The report also said that GM topped out at $52 billion in 2000.

I don't know, but something there does not seem right to me. From 1929 to 2000 it only went up 13 fold? The high point for the Dow in 1929 was 381. The low point for the Dow in 2000 was 9796. So while the Dow went up 25.7 fold, GM went up only 13 fold? If we use the 2000 high point of 11,722 then the Dow was up 30.7 fold. In that light, how was "what's good for GM good for America?"

Comments

[kowalski:]

So while the Dow went up 25.7 fold, GM went up only 13 fold? If we use the 2000 high point of 11,722 then the Dow was up 30.7 fold. In that light, how was "what's good for GM good for America?"

*

Maybe, just maybe GM used to pay fair salaries to his workers?!

2008 Oct 09 02:33 PM

[Chris B:]

It's called shareholder dilution - look at the shares outstanding.

GM's main products are shares in itself and junk bonds. Look at the debt/equity ratio.

At this point, the only people owning GM stock are index funds who have to buy it and employees who were suckered into accepting shares as compensation.

2008 Oct 09 02:59 PM

[igggy:]

To the author: you forgot the dividend!?

2008 Oct 09 05:37 PM

[Bibble:]

How was "what's good for GM good for America?"

You have got to be kidding me. It's no wonder our economy is so screwed when self-described experts look to the cosmos for answers about top soil. Ever hear of fast food? What made that possible? What do you suppose crude oil is used for? How many Americans over the last 100 years have earned a living doing road construction and maintenance? Ever tried taking a covered wagon from LA to Vegas? Could their be a Vegas without a Detroit? Half of the Fortune 500's Top Ten Revenue Earners for 2007 were either Oil or Automotive companies (22Tango) – with GM at #3, Ford #7. You can make criticisms of their management decisions until the Dow comes home, but to suggest that GM as a company or Auto as an industry has not been good for America reeks of the kind ignorance and arrogance that seems to be a modern MBA requirement. Hello. The stock market is not an indicator of actual value. Ask anyone who's ever needed an ambulance or a squad car. Sheesh. Stop fantasizing about the magical Knowledge Economy that craps droplets of gold and wisdom from the ether, and start making the actual, reality-based, value-creating economy work.

2008 Oct 10 09:10 AM