Merrill Lynch Cuts General Motors (GM) to Underperform, Says "Bankruptcy Is Not Impossible"

Merrill Lynch downgrades General Motors (NYSE: GM) from Buy to Underperform and lowers their price target from $28 to $7, saying a larger capital raise is needed and bankruptcy is not impossible.

The firm said a much lower forecast for auto sales is driving a higher cash burn, which creates a need for a much larger capital raise than the market is anticipating. The firm added, "bankruptcy is not impossible."

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