GM Stock Lowest in 55 years - Target Price: Zero, AIG eats more government cash

GM's Securities

Fitch Ratings has warned of GM's "rapidly diminishing liquidity position" and DB has set a target price of zero for the stock. (aside: check out DB's art website here, DB owns the world's biggest corporate collection of art).

STOCK
GM has dropped from $33 to $3 this year, following DB's downgrade. The short interest on GM stock is currently 93.5 million - short interest is the number of shares of a stock that have been sold short but not yet covered (by depositing funds) or closed out.

OPTIONS
GM's most active contracts were November $3 puts. Their value more than doubled to 70 cents.

DEBT
GM's debt is trading at "stressed" prices. "Stressed" is basically one level above "distressed".

Will federal bank-bailout funds be opened up to automakers?

The Treasury announced it will pay $40 billion for another 2% stake in AIG (preferred shares), which has posted a $24.47 billion loss for Q3. The term of the loan has been extended from 2 years to 5 years. AIG was involved in insurance of CDOs.

The ignominious position of GM will force management to reflect on its history. Founded on September 16, 1908 in Flint, Michigan (now hq'ed in Detroit) as a holding company for Buick, controlled by William C. Durant of Boston. He lost control of GM in 1910 to a banker's trust due to excess debt taken on in its acquistions followed by the collapese of new vehicle sales. A few years later he started Chevrolet, and reassumed control of GM by building up secret stakes.