Why would GM do this? Because they know that based on the current total shares outstanding a share of GM should be heading quickly to $0.18 (from the current level of $1.85) given the massive dilution that will occur in any of the restructuring options currently facing them (why this isn’t reflected in the current share price is a complete enigma).
A 1-for-100 reverse split would take the share price up from $0.18 (where it should be trading right now) to $18.00, which is an attractive price level (it would improve the marketability and liquidity of GM stock and may encourage interest and trading in the shares of GM…bla bla bla…). It can’t be that GM is aiming to take their share price up from $1.85 to $185.00.
This story was reported by AP on Yahoo.
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