GM (GM) Opening Up to Possibility of Bankruptcy -WSJ
According to a Wall Street Journal article, execs at General Motors (NYSE: GM) are becoming more open to the possibility of a bankruptcy filing. The change in sentiment is a flip-flop from management's prior view that such a move would scare away potential auto buyers questioning the viability of a bankrupt company.
The news follows reports yesterday that a GM auditor expressed some worries (in the automakers 10-K filing) that the company could remain a "going concern".
GM, after months of analysis by numerous bankruptcy advisers, now feels that a "prepackaged bankruptcy" filing could push them through reorganization in just a few months. One advantage of a prepackaged filing is that the related parties -- auto part suppliers, union workers and even bondholders -- would agree to concessions in advance.
Shares of GM are moving down about 8% in this morning's pre-market session. The stock most recently traded at $1.71, and is, notably, trading below Ford's (NYSE: F) stock price of $1.78 (Ford's stock is only down 1% amid the news).
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