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GM up over 15% since IPO

Selling 100,000+ more vehicles in December (compared to the year before) with only 4 brands instead of the eight probably helps.
 
Disbelief said:
Selling 100,000+ more vehicles in December (compared to the year before) with only 4 brands instead of the eight probably helps.
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It also probably helped that everyone was so down on GM, even while they were doing the IPO. (Re-read the financial reportage surrounding GM's IPO and see how many of them noticed that GM was actually making and selling cars profitably? It's not like it was a secret, except to the financial editors....)

I think GM will go down as a classic instance of market irrational groupthink. Yes, the company had problems, but they weren't nearly as great as Mr. Market whipped himself into a frenzy over.
 
Disbelief said:
Selling 100,000+ more vehicles in December (compared to the year before) with only 4 brands instead of the eight probably helps.
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I've always been curious about why GM used the "huge number of brands" strategy. Hiding behind Opel and Vauxhall in Germany and UK. Whereas Ford is just... Ford. Everywhere.
 
The Central Scrutinizer said:
Likely due to the way the company was formed.
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And differential marketing.

YUM brands is another example. It's basically a holding company that owns four brands of fast food: A&W Restaurants, KFC, Long John Silver's, Pizza Hut, and Taco Bell. But KFC was around long before YUM brands was, and people have a brand loyalty to KFC that would be lost if YUM re-branded its chicken operations as YUMmy Chicken or something. So YUM still operates KFC under the KFC name.

Same principle -- people don't buy "GM" cars, they buy Chevys or Pontiacs or Cadillacs. Cadillac was a symbol for luxury cars before GM bought it.

It also allows GM (or YUM) to market differently to different groups; Cadillac is a luxury brand, Pontiac is a performance brand, Chevy is an entry/family car brand,.... and KFC does chicken and Taco Bell does Tex-Mex. If I find that disgusting double-decker chicken sandwich, um, disgusting, I can still be persuaded to buy a taco or something.
 
Almo said:
I've always been curious about why GM used the "huge number of brands" strategy. Hiding behind Opel and Vauxhall in Germany and UK. Whereas Ford is just... Ford. Everywhere.
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Actually, this is only sort-of true and only recently at that.

Ford Motor Company until very recently controlled Ford, Mercury, Lincoln, Aston Martin, Volvo, Mazda, Jaguar, and Land Rover. They sold off most of those divisions to raise cash.

It's just that there's no "GM" brand to be the flagship of GM.
 
Puppycow said:
Interesting. The IPO was $33. Now it's already up to $38.

http://www.google.com/m/finance?source=mog&hl=en&gl=us#search/gm
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Of course the stock is doing well. If your company just erased all its debt by 'decree from the king', then you would be happy, too. I wish I was like GM, and I didn't have to pay my debts.

Just to be clear, this may turn out to be a positive deal from the government. But the holders of GM debt are permanently screwed, and won't benefit one penny from this.
 
You know, when you dump all of your debt and push out all of the subsidiaries who weren't doing well, it's not surprising that your stock would go up.

Shame that all this helps is the people who own the "new GM" stock. Those who owned stock before the bankruptcy now just own shares in those subsidiaries that GM has hung out to dry.
 
CatOfGrey said:
Of course the stock is doing well. If your company just erased all its debt by 'decree from the king', then you would be happy, too. I wish I was like GM, and I didn't have to pay my debts.


Just to be clear, this may turn out to be a positive deal from the government. But the holders of GM debt are permanently screwed, and won't benefit one penny from this.
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What would the bondholders have gotten if the government hadn't lifted a finger to help GM?
 
Weak Kitten said:
You know, when you dump all of your debt and push out all of the subsidiaries who weren't doing well, it's not surprising that your stock would go up.

Shame that all this helps is the people who own the "new GM" stock. Those who owned stock before the bankruptcy now just own shares in those subsidiaries that GM has hung out to dry.
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What would the stock in "old GM" be worth now if the government hadn't lifted a finger to help GM?
 
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