What's Next For 'Old GM' Shares (GMGMQ)?
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- What's Next For 'Old GM' Shares (GMGMQ)?
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We continue to follow the developments related to the shares of the 'Old GM' (OTC: GMGMQ), now known as Motor Liquidation Company, which were halted Friday by FINRA due to confusion in the market after the "New GM" emerged from bankruptcy. The news created a nearly 40% boon in the shares of GMGMQ.
Even though GM management warned investors that the common shares of the 'old GM' would be worthless, investors and speculators were buying the stock, mostly foolishly, but also as a way to make a quick day-trading profit on the market confusion.
Because of the media frenzy on GM's emergence from bankruptcy, regulators should have had the foresight to never allow trading of GMGMQ on Friday. Well they didn't. Shares opened and skyrocketed higher, as investors were hoping to get their piece of the new, streamlined, government-backed GM. Because there is no publicly traded securities for the new GM, GMGMQ was the only trade and investors flocked into it. In addition, traders that know the game accumulated shares figuring they could sell it to the "greater fool" later, for a profit. It wasn't until 2:09PM Friday, after prodding from StreetInsider.com and others, that FINRA wisely halted the stock, as not to further the scam.
So what now? The halt was handed down by FINRA, not the SEC, so trading would have to resume in 10 days or the market must be given an update from the company or FINRA. That means on or before July 24th we will find out the fate of GMGMQ.
There are many different scenarios that could play out at this point. Here are three:
- FINRA could lift the halt and trading could resume in Motor Liquidation Company under a new stock symbol. If this is the case, market makers would have to fill out form 211 on the new ticker or trading could continue on the grey market.
- The company could cancel and de-list the shares
- SEC could revoke the security
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ATTENTION!!!
They have lifted the freeze on the old gmgmq stock sold mine for .55, hurry if you have some!!!! This stock is also worthless so dump it, actually heard the stock news saay that this morning, would of been nice on Friday.
July OPEX
Ahhhh, that's an excellent point. I'll admit that I hadn't considered that issue with regard to folks who have spreads. Yep, I follow you there. All the more reason that (hopefully) FINRA will see how important it is to make a move on this by Friday.
(2) response to Michael re: July OPEX
Another wrench in the works though. Though I am a net seller (writer) of July $1 CALLS, I limit my risk by using vertical spreads (i.e., I own $2 and/or $3 CALLS, though realistically worthless). The giant ambiguous situation is what if, after expiration day, the stock is resumed at say ... $5, and I was assigned on my $1 CALLS. In this case, I would normally exercise my $2 CALLS to limit my loss to $1 per contract. The problem is, if resumption doesn't occur until next week, then it will be too late for me to exercise my far OTM protective CALLs! This is just crazy stuff. Wonderful for a university finance class, but in the real worth this is ... real dough.
gmgmq
As if the American people have not been through enough...I am also with e-trade and agree that they gave no warning that the stock being traded Friday was anything but GM. I did not vote Obama however I feel he is making a serious effort to help the American people in the short term, probably not my long term strategy, however we support him because he is now our President. That said I can't believe he does not come out and stand up for the American people who were obviously duped into buying what was stated as a GM "out of bankruptcy stock" hence the 40% rise in the price. If he really wanted to show that he was for the people and not the special intrests of the recipients of the more than 200 million that was acquired by a company in one day, the same day their stock was frozen, this would be the time to do it. Personally invested in 10,000 shares. Losing that money won't make my cheerios any less crunchy in the am but I can't help to think of those who are really being hurt by this obvious oversight, doubtfull,,,,but we will say oversight. Side note for all of those comments from the synical, pathetic critics of those of us who ignorantly invested on Friday, I agree we must look stupid for not knowing that it was the old Gm as all of you state from your lofty, iq stuffed clouds, but I imagine that that cloud resides in a very small apartment, which is only occupied by you, when you either come home at night from the school, which your parents pay for, or from the menial job you work, because your character which you, the all knowing, have never developed, because anyone who has a house and family to raise and chooses to take financial risks to get ahead today would never respond to others tragedies in the manner I have seen displayed. My heart goes out to all of those that were duped, and to the critics who say we should of known better, you were right, to those who call us stupid and that we should not even breath the same air you breath,,,in the time it took you to think up in your wittle, brain ,,spelled correctly,, wittle. ..I made your weekly salary. PS. take your comments and show them to your grandfather, show him how you made a funny in regards to all those stupid people who mistakenly invested in GM, he will love it trust me, and when you get up off the ground show him again, he will think it funnier the second time! Again trust me.
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gm
patty on Jul 16, 2009 12:33 PMi am just the averag house wife who only has a little money in the stock market and thought i was getting a deal on the new gm by purchasing a small amount of stock while it was down so are you saying i was wrong and that they fooled me into buying stock that was worth nothing. i feel like madoff is at work here.