Proving once again that greed and idiocy often go hand in hand, federal regulators have revealed that investors are still plowing money into General Motors stock--the only problem being that the General Motors in which they're investing is technically Motors Liquidation Company, aka "Bad GM". What we think of as "Good GM" is now General Motors Company, which is not publicly traded. (Yet.)
According to a report in Detroit News, 13.9 million shares of Motors Liquidation Company changed hands yesterday, even though the feds have clearly changed the ticker symbol from GMGMQ to MTLQQ.PK. Folks on the inside suggest that eager buyers fall into roughly two groups: (a) day traders moving large volumes of stock and hoping to make a quick buck on the stock's daily swings of up to 50 cents, and (b) individuals who think they're buying stock in "New GM" at a great price. Yesterday, the stock closed at 85 cents, down 4.1% for the day.
No one is likely to feel sympathy for day traders, and very little for the confused (like they say: caveat emptor), but there is one group that earns a soft spot in our hearts: Detroit residents looking to buy "Bad GM" stock because they want to see General Motors succeed. Says Ron Humenny, a Detroit-based investment adviser, "The thing about people in the Detroit area is we're homers.... We want to root for the home team. A lot of times people will do that, more with their heart than with their head."
We're not financial advisors (hello: understatement), but we're pretty sure things aren't going to end well for any old-GM stockholder, no matter how noble their intentions. Yes, Motors Liquidation Company is still a company, and as such, it has to have owners, so its stock will remain on the market. However, when the company's assets are zeroed out, there'll be no value to be had for anyone. Maybe you'd be better off buying a golf course instead.