GM falls to 76-year low as execs sell stock

Vice chairman and 5 others disclose they sold stock and remaining direct holdings in the automaker. Shares plunge 22%.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)

gm.mkw.gif
Click the chart to view GM's latest stock prices.

DETROIT (Reuters) -- General Motors Corp. stock plunged more than 22% to a 76-year low Tuesday, a day after a group of GM executives disclosed they had sold shares in the struggling automaker.

Six GM executives, led by former GM Vice Chairman and product chief Bob Lutz, disclosed Monday that they sold almost $315,000 in stock and liquidated their remaining direct holdings in the automaker.

The stock sale underscores the extreme pressure on GM with less than three weeks remaining for the embattled automaker to win deals to slash debt and operating costs with its major union and bondholders to avoid bankruptcy.

GM (GM, Fortune 500) is headed for either a bankruptcy filing or an out-of-court restructuring that would wipe out current stockholders by flooding the market with new shares to pay off creditors.

The automaker's stock could be worthless in a bankruptcy or worth less than 2 cents apiece if it proceeds with plans to issue shares to creditors led by the U.S. Treasury Department, the company has said.

"It's a lose-lose situation as far as we see it, and the shares kind of seem to have been doing a levitating magic trick and just staying up there in the $1.50 to $2.00 range," Standard & Poor's equity analyst Efraim Levy said.

"Given that there is a two-week deadline coming there should be additional downside pressure," Levy said.

The automaker has historically been one of the powerhouses in the best-known measurement of U.S. stocks, the Dow Jones Industrial Average. It has been on the index for 83 consecutive years and despite the dramatic fall in the price of its shares, Dow has still kept the stock as part of the index.

GM's market capitalization as of Tuesday was about $690 million, making it one of the smaller Dow members.

The company has lost $88 billion since its turnaround efforts began in 2005 under former Chief Executive Rick Wagoner.

The automaker's shares were down 21% or 30 cents, at $1.14 on the New York Stock Exchange. The stock had fallen to as low as $1.09 earlier in the day, the lowest since 1933.

GM was first listed on the Dow in 1915. Journal editors removed it - as they did more frequently back then - adding it again in 1925, and it has remained ever since. Only General Electric Co. (GE, Fortune 500), which joined in 1907, has been there longer. To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
Most 'one percent' moments of 2014 This year was all about more money, more problems. Here's a look at the trials, tribulations and triumphs of the 1% over the last year. More
6 products to keep the skies friendly Plane travel can be stressful, especially during the holidays. These things can help keep the peace among travelers. More
2014: Helluva good year for stocks The bull market has been going for 2,115 days. If you put you're money in stocks, it's been a very happy year. More
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

Copyright 2009 Reuters All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.