Gerry Sullivan

GM: To File or Not to File, That Is the Question

I think they will be trading on Monday, but symbols may be different.
The symbols may be changed if GM files bankrupcy.

The GRM is not trading because trades would settle after the maturity. It will probably resume trading on Monday.

GM: To File or Not to File, That Is the Question

I sold all of mine. I think that the GM bonds are a good investment, but I am a trader.

I was not able to find the new symbol for GRM.

GM: To File or Not to File, That Is the Question

If GM files Chapter 11 bankrupcy, which now seems almost certain, the GRM will not be worth any more than the other $25 par bonds.
Based on the expectation of a GM bankrupcy, the price of the GRM and the others will converge.

GRM is still trading a bit higher than the others like BGM because there is still a slim chance that GM won't file.

GM: To File or Not to File, That Is the Question

Sold half my BGM position at $2.39...

GM: To File or Not to File, That Is the Question

Thursday morning. GM is amending exchange offer. One fact that all the commentators have missed is that GM has the month of June to
work out a deal with GRM holders even though the bonds mature on June 1.

I now think that GM will possibly offer more to the holders of GRM after the June 1, 2009 maturity date passes.

GM: To File or Not to File, That Is the Question

I did sell GRM. I am long BGM and may repurchase GRM.
The GM $25 par bonds selling for around $1.85 are the best play.
The GRM could be an instant score, but higher risk also.

If GM pays off the GRM I will be kicking myself, but then the others will still be paying the interest which is close to 100% annually.

I now plan to buy more of the lower priced $25 par bonds if GM files
bankrupcy.

GM: To File or Not to File, That Is the Question

If GM files, GRM will be no better than the others. A bit worse, in fact, because it pays the lowest interest rate, 1.5%, and the accrued but unpaid interest might be a factor in the ultimate workout. If GM doesn't file, GRM will be the best, paid off at $25.

I originally recommended a blend of 4 BGM (or equivalent) for each 1 GRM and that gave me an average cost of $1.58 per $25 par.

If you shoot craps (a very appropriate comparison) this is like placing a bet on the number 8 and another bet on the "hard 8."
GRM is the "hard 8."

If you are starting right now, it probably is best to buy one of the
$25 par bonds that trade around $1.75.

Trading the GM Bankruptcy

It would be a mistake to think that the GM common stock will be worthless. It may have very little worth, but it will have value as a corporate shell with an immense tax loss. Back in the late 1960s when several railroads went bankrupt, the corporate shells were scooped up and were used to minimize taxes on profitable businesses.

Penn Central became part of American Financial Group (AFG).

I do not own any GM shares and own GM debt like the author. I think the debt is a better way to play this unfolding situation.