30 Investors Bound to Lose Big on GM

Includes: AB, BCS, BK, C, GBL, GM, MS, SCHW
by: Rick Newman

If General Motors (NYSE: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 ((NASDAQ: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

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