GM stock touches $1, lowest since Depression
The automaker's shares recover and steady above a buck after hitting a 76-year bottom that followed executives' sale of stock.
NEW YORK (CNNMoney.com) -- General Motors Corp. stock briefly plunged to $1 a share in Wednesday trading, flirting with its lowest levels since the Great Depression, before it managed a recovery.
GM's (GM, Fortune 500) stock price dipped to $1 shortly after the start of trading. The stock hasn't closed that low since April 19, 1933, according to split-adjusted calculations from the Center for Research in Security Prices.
Shortly after the opening bell, the battered, Detroit-based auto giant managed to recover slightly, hovering near its Tuesday close of $1.15. In midday trading, the stock managed to gain about 15 cents.
As recently as 2007, the stock was trading above $40 a share and has lost about 95% of its value since one year ago, when it closed at $20.20.
The automaker's stock price peaked on April 28, 2000, when it closed at $93.625. Auto sales were at a record high.
David Silver, analyst for Wall Street Strategies, said that $1 is a "big mental barrier for a stock" and he expects GM to plunge much further.
"My price target is zero right now because I think the company's going bankrupt," he said.
Silver described GM as a day trader's stock and said it's one of the 10 most short-sold companies on the New York Stock Exchange.
The latest slide in the stock began Tuesday, when GM plunged more than 20%. It occurred after a half-dozen GM executives, including vice chairman Bob Lutz, disclosed Monday that they'd sold off $315,000 worth of shares.
The money-losing automaker -- which has experienced healthier sales overseas than in the United States in recent years -- has until the end of May to meet the federal government's demands to cut costs and come up with a new plan for viability.
GM has received $15.4 billion in government assistance so far this year. The company lost $6 billion in the first quarter and burned through $10 billion in cash.
One of its U.S.-based rivals, Chrysler, which is owned by the private equity firm Cerberus Capital Management, recently filed for bankruptcy as part of a plan that will give control to Italian automaker Fiat and the company's unions.
GM Chief Executive Fritz Henderson has said that a bankruptcy filing, which would likely wipe out current shareholders, is the most probable option for the company.