Frankly, if a company goes bankrupt, I don’t see why the stock isn’t just completely finished. GM’s stock wasn’t finished today though — trading at one point at just over a dollar on the NYSE.
This great article from the Los Angeles Times lays out the details of why stocks trade after a bankruptcy. Essentially it has to do with short sellers needing to cover positions and those unfortunate to be holding for the really long haul needing a place to sell their shares. Who in the hell buys those shares?
At any rate, GM, formerly ticker symbol “GM” on the NYSE, will trade beginning June 2 as GMGMQ on the “penny” stock market at pinksheets.com.
Author of Why GM Matters, William Holstein, took questions today over at the Washington Post. Check out the transcript. Here’s what he had to say about GM’s shareholders:
Washington, D.C.: What happens to GM Stockholders now? I’ve seen a lot of info about bondholders, but that’s not the same (or is it)?
William Holstein: GM stockholders are expected to be wiped out. You get nothing for your shares. They become collector’s items.