Any stock traders on here?
- Thread starter Jett
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No, you didn't search.
What is a stock? Used to trade S&P futures that market sucks doing the eur now.
O-Ace said:
Jett said:
I was a Muni Bond trader for 18 years. Now I trade equities for my own account.
My favorite pastime is shorting high flying pig stocks. I'm currently short BIDU from the 112 area and short GOOG which is an ongoing adventure. When GOOG finally dies it will be a nasty death. People have short memories. This is exactly like Yahoo on it's way up to nearly 500! I can't wait for the slip into the abyss. :biggrin:
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Hugh said:
Remember the downfall of KKD and TASR? Those were great to watch fall. :biggrin:
interesting (and fairly common) perspective on goog... i'm not sure i agree with you. (fwiw, i'm not a professional finance/trader and i own no goog)Hugh said:
my observation is they're a very unusual case -and thus not sure if reference to yahoo or any other dotcom crashee does them justice - given their cash that is driving their massive breadth of technologies related to our day to day lives - and those of the next generation... on a **global** basis.
my observation (and evolving conclusion) is they're a major force, making a sh*tload of new technologies fairly commonplace while finding a means of leveraging each of their segments to generate cash.
having said that, i also believe the axiom of "what comes up must come down" is not a bad thing to keep in mind.
In that case, my bad. I know we had a pretty long thread going a while back...maybe it got archived or purgedsteveny said:I did and could not find that thread we started.
:frown:
steveny said:I did and could not find that thread we started.
thats cause you didnt start it!! Bwahahhahahaahaaa
http://www.nsxprime.com/forums/showthread.php?t=25718&highlight=stock+market
You know i luv ya steveny!! :wink:
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You shorted BIDU at 112? Sweet. I know of one famous trader who was bullish on BIDU when it was trading at around that price. It would be interesting to know how he fared, but they trumpet their winners and don't talk about their losers. Still, this guy is an experienced trader and knows what he is doing if anyone does. I hope you are holding a large block of it.
Google is a tempting short; I watch it but have begun to view it as a market bellweather. When it dives the entire market will dive out of sympathy for it. I think the eventual Google selloff may be the number one signal foretelling a serious market dive, particularly for the NASDAQ. It will be all over the news, especially the financial networks like CNBC, but CNN and the 6 0'clock local news as well. The resulting panic will drive the market waaay down. When Google dives I will be looking to short anything in sight, but particularly the NASDAQ.
Google is a tempting short; I watch it but have begun to view it as a market bellweather. When it dives the entire market will dive out of sympathy for it. I think the eventual Google selloff may be the number one signal foretelling a serious market dive, particularly for the NASDAQ. It will be all over the news, especially the financial networks like CNBC, but CNN and the 6 0'clock local news as well. The resulting panic will drive the market waaay down. When Google dives I will be looking to short anything in sight, but particularly the NASDAQ.
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i'm curious - what % drop over what period of time would you consider a "dive" wrt goog?Jett said:
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Well, the first thing I would watch for would be a gap down, of any size. I think it is more likely to gap down at first than to slide off. Of course, a gap down would be more desirable because it would be such a bearish signal. If it slides, I would consider about $275 support, so if it broke through support and continued down this would probably take the market down with it.
Do you know what is most important here? What is most important here isn't whether or not I am right, it is whether or not you or everyone else stops and goes, wow, that makes a lot of sense! If you think that way, then you are in the same herd as everyone else. Including me. I want to be in this herd, and try and anticipate when it turns. Follow the trend!
Do you know what is most important here? What is most important here isn't whether or not I am right, it is whether or not you or everyone else stops and goes, wow, that makes a lot of sense! If you think that way, then you are in the same herd as everyone else. Including me. I want to be in this herd, and try and anticipate when it turns. Follow the trend!
and over what periods of time would you consider either a "gap down" or a "slide"?Jett said:
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Uh, a gap down happens in one day. Actually overnight between trading days. You can look it up on investopedia.com
The time period for a slide would be however long it took to fall from wherever it starts dropping, down through the second support level of around $280. However long that took would be how long it took. I would think it would slide pretty fast, say in a week. Once it starts trending down the downtrend will most likely accelerate, although the upper support level of $300 may stall it out temporarily. Fear is a stronger emotion than greed.
Note that this is based on current chart patterns. In six months the chart will look different and the support levels may change. Right now I think it has support at $300 and at $280, but this may change. You have to reconsider and possibly readjust your viewpoint as time progresses.
Do you work for Google? If you do and have stock options, exercise them and take the money! Don't try and hold out for the last ten percent.
The time period for a slide would be however long it took to fall from wherever it starts dropping, down through the second support level of around $280. However long that took would be how long it took. I would think it would slide pretty fast, say in a week. Once it starts trending down the downtrend will most likely accelerate, although the upper support level of $300 may stall it out temporarily. Fear is a stronger emotion than greed.
Note that this is based on current chart patterns. In six months the chart will look different and the support levels may change. Right now I think it has support at $300 and at $280, but this may change. You have to reconsider and possibly readjust your viewpoint as time progresses.
Do you work for Google? If you do and have stock options, exercise them and take the money! Don't try and hold out for the last ten percent.
gotcha, thanks for the feedback.Jett said:
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Here is something I have never given before, and never take myself, but....a stock tip. Short GM. Just short it. Based on everything I see in the financial press, and despite a run-up after a pep rally by GM yesterday where they used the old magician's trick by trying to misdirect the stock buying public away from the dismal earnings they posted, I believe they are going to take GM into bankruptcy. I mean, deliberately and knowingly take it into bankruptcy. Ie, that management full intends RIGHT NOW to take it into bankruptcy. As one analyst said, and I agree, Monday the situation reached the tipping point. Most analysts are downgrading the stock, for good reason. GM is hemorraging cash, and the pep rally was to try to keep cash coming in a little longer. They stopped offering earnings guidance months ago, which means they have something to hide. (If earnings are good, you crow about it. If they are bad, you 'fess up to it. If they are stunningly bad, you hide it.) I believe GM and the UAW are deliberately not telling the public what they are planning. This is probably that rare moment when ALL indicators point in the same direction; they all point toward bankruptcy. Why sell a large portion of GMAC, your cash cow? The only reason is to try and raise cash in the short-term. It would be a brain-dead stone cold terrible idea to sell a stake in it in the long-term. But what if there isn't a long term? I also believe that the UAW is fully aware of a bankruptcy plan, and that they have accepted it as inevitable. The UAW was recently in court arguing FOR GM to be able to execute plans to reduce employee costs, which I believe is an effort to pare down "NEW GM's" future, post-reorganization employee and retiree liability, before forking over "OLD GM's" pension plan to the PBGC (taxpayer). GM is getting ready to dump a bunch more employees and retires overboard.
GM will sell off as much assets as possible to raise hard cash, dump the pension plan, and try to reorganize as the NEW GM, in much the same way as the airlines (look at United Airlines as an example) have done and are doing. The temptation is just too great, and there is no alternative. The blood flow (red ink) is just too large. I believe this will happen relatively quickly. How quickly? I would guess pretty soon. They have to stop the bleeding before the patient is dead, so they need to act pretty fast. I also find it reprehensible that both sides (GM and UAW) seem to be in cahoots in trying to obscure their real intentions, with the apparent goal of deceiving the public, then luring people to the slaughter. Certain entities in the financial industry seem to be in collusion also; without looking, I can almost guarantee you that Morgan Stanley has a more favorable rating on GM than any other firm.
Another confirming signal: Volume in "puts", or options which indicate that the buyer feels the stock price will fall, surged across almost all strike prices, even those not particularly "near-the-money".
What caused me to realize what is about to happen (bankruptcy) is an unusually high open interest in GM March 06 7.50 puts (option symbol: GMOR). When I first saw that, I was like, that doesn't make any sense; that much volume and open interest is EXTREMELY speculative. It's crazy. Who would buy those puts? So I brushed it off. Only later, on my drive to work, did it dawn on me that the buyer or buyers are making a substantial bet (520,000 shares so far) that GM will be in bankruptcy by March 19, 2006. Why do I think their actions mean that? The buyer or buyers of the puts simply sought the put with the cheapest purchase cost, the highest strike price, and the longest maturity possible. Which shows that the buyer or buyers are simply betting that GM will be in bankruptcy by March of next year, and accordingly although they care about the strike price some, they don't really care about it very much. Because without much regard to strike price (critical when selecting options), bought the cheapest put with the longest maturity available at a low cost. The most important factor was cost (to be able to control the most shares), followed by maturity (longer is better, gives you more time for the maneuver to work), followed by strike price. Normally, strike price would be most important, then price versus maturity would have to be weighed against one another. So this move seems to turn normal logic on it's head. Is this an insider move (GM or UAW)? GM insiders are supposedly currently "banned" from trading the stock. The reason they are "banned" is because the company knows that they would dump that stock like a hot potato if they could, but that would be baaaad for the company, hence the ban. But there are more insiders than just top management. ie, insiders that don't have to report transactions to the SEC. Those GMOR puts sure smell like insider trading to me. The last time I looked at the options chain, those puts could be purchased for ten cents per share (price is probably up a little by now). So for ten dollars you could control 100 shares of GM, a hundred dollars to control a thousand shares, a grand for ten thousand shares, and $52,000 to control 520,000 shares. Say someone bought one hundred GMOR contracts tomorrow for, say, $1500 (in this example the cost has risen). If GM DID go into bankruptcy by March, they would stand to make more than $7 per share, or more than $70,000 on a total maximum risk of only $1500. If GM traded down below about $7.34, they would still make a little money, or they could possibly even make a little money reselling the puts themselves, but clearly their belief is that the company will enter bankruptcy. In the event of bankrupcy, and GM stock going to zero, the current holder or holders of the GMOR puts would net $3.8 million!
Is GM going to go into bankruptcy? Highly likely; all indicators point towards bankruptcy. Within five months? I don't know. Could they go bankrupt that fast? Oh yes, absolutely. If they wanted to file tomorrow they could, then begin the liquidation process. But I think they need to tie up some loose ends first. Still, I see no incentive to continue operating at such a substantial loss for very much longer. Better to get it over with sooner. I think GM will head for bankruptcy court within the next six months for sure.
Note that I am advocating two different things here, one more so than the other. Do I think someone could...
1) make money by shorting GM stock right now? Absolutely, positively, unequivocally yes, I do think so. I think shorting the actual stock has a much better chance of providing some return, but it will take more money than with options, with higher risk.
2) make money by purchasing GM puts? Yes, but buying the put has a lesser chance of providing some return, although for a much smaller initial outlay at any strike price, and with limited risk. (limited to what the purchaser paid for the puts.) Admittedly more speculative, especially the GMOR puts, but the risk versus reward is very attractive. For $1500 the "little guy" could control the same amount of shares as someone with a $300,000 trading account. (Exercising them would be harder with a small brokerage account.) Would I personally risk $1500 to maybe, just maybe, make $70,000, and maybe end up losing the $1500 instead? Well, I would, you should decide what is right for you. How about other GM puts of different costs, maturities and strike prices? Good question! A smart speculator would definitely peruse the GM option chain closely and see if he or she could identify the put that would suit him or her best, if he or she were so inclined to speculate in GM stock.
Do I know what I am talking about? Maybe I am an army of one, but I don't think so. I am convinced that GM will enter bankruptcy soon. So you be the judge...research it yourself. Be advised that my money is where my mouth is.
GM will sell off as much assets as possible to raise hard cash, dump the pension plan, and try to reorganize as the NEW GM, in much the same way as the airlines (look at United Airlines as an example) have done and are doing. The temptation is just too great, and there is no alternative. The blood flow (red ink) is just too large. I believe this will happen relatively quickly. How quickly? I would guess pretty soon. They have to stop the bleeding before the patient is dead, so they need to act pretty fast. I also find it reprehensible that both sides (GM and UAW) seem to be in cahoots in trying to obscure their real intentions, with the apparent goal of deceiving the public, then luring people to the slaughter. Certain entities in the financial industry seem to be in collusion also; without looking, I can almost guarantee you that Morgan Stanley has a more favorable rating on GM than any other firm.
Another confirming signal: Volume in "puts", or options which indicate that the buyer feels the stock price will fall, surged across almost all strike prices, even those not particularly "near-the-money".
What caused me to realize what is about to happen (bankruptcy) is an unusually high open interest in GM March 06 7.50 puts (option symbol: GMOR). When I first saw that, I was like, that doesn't make any sense; that much volume and open interest is EXTREMELY speculative. It's crazy. Who would buy those puts? So I brushed it off. Only later, on my drive to work, did it dawn on me that the buyer or buyers are making a substantial bet (520,000 shares so far) that GM will be in bankruptcy by March 19, 2006. Why do I think their actions mean that? The buyer or buyers of the puts simply sought the put with the cheapest purchase cost, the highest strike price, and the longest maturity possible. Which shows that the buyer or buyers are simply betting that GM will be in bankruptcy by March of next year, and accordingly although they care about the strike price some, they don't really care about it very much. Because without much regard to strike price (critical when selecting options), bought the cheapest put with the longest maturity available at a low cost. The most important factor was cost (to be able to control the most shares), followed by maturity (longer is better, gives you more time for the maneuver to work), followed by strike price. Normally, strike price would be most important, then price versus maturity would have to be weighed against one another. So this move seems to turn normal logic on it's head. Is this an insider move (GM or UAW)? GM insiders are supposedly currently "banned" from trading the stock. The reason they are "banned" is because the company knows that they would dump that stock like a hot potato if they could, but that would be baaaad for the company, hence the ban. But there are more insiders than just top management. ie, insiders that don't have to report transactions to the SEC. Those GMOR puts sure smell like insider trading to me. The last time I looked at the options chain, those puts could be purchased for ten cents per share (price is probably up a little by now). So for ten dollars you could control 100 shares of GM, a hundred dollars to control a thousand shares, a grand for ten thousand shares, and $52,000 to control 520,000 shares. Say someone bought one hundred GMOR contracts tomorrow for, say, $1500 (in this example the cost has risen). If GM DID go into bankruptcy by March, they would stand to make more than $7 per share, or more than $70,000 on a total maximum risk of only $1500. If GM traded down below about $7.34, they would still make a little money, or they could possibly even make a little money reselling the puts themselves, but clearly their belief is that the company will enter bankruptcy. In the event of bankrupcy, and GM stock going to zero, the current holder or holders of the GMOR puts would net $3.8 million!
Is GM going to go into bankruptcy? Highly likely; all indicators point towards bankruptcy. Within five months? I don't know. Could they go bankrupt that fast? Oh yes, absolutely. If they wanted to file tomorrow they could, then begin the liquidation process. But I think they need to tie up some loose ends first. Still, I see no incentive to continue operating at such a substantial loss for very much longer. Better to get it over with sooner. I think GM will head for bankruptcy court within the next six months for sure.
Note that I am advocating two different things here, one more so than the other. Do I think someone could...
1) make money by shorting GM stock right now? Absolutely, positively, unequivocally yes, I do think so. I think shorting the actual stock has a much better chance of providing some return, but it will take more money than with options, with higher risk.
2) make money by purchasing GM puts? Yes, but buying the put has a lesser chance of providing some return, although for a much smaller initial outlay at any strike price, and with limited risk. (limited to what the purchaser paid for the puts.) Admittedly more speculative, especially the GMOR puts, but the risk versus reward is very attractive. For $1500 the "little guy" could control the same amount of shares as someone with a $300,000 trading account. (Exercising them would be harder with a small brokerage account.) Would I personally risk $1500 to maybe, just maybe, make $70,000, and maybe end up losing the $1500 instead? Well, I would, you should decide what is right for you. How about other GM puts of different costs, maturities and strike prices? Good question! A smart speculator would definitely peruse the GM option chain closely and see if he or she could identify the put that would suit him or her best, if he or she were so inclined to speculate in GM stock.
Do I know what I am talking about? Maybe I am an army of one, but I don't think so. I am convinced that GM will enter bankruptcy soon. So you be the judge...research it yourself. Be advised that my money is where my mouth is.
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Dumb question:
Logistically speaking, what happens if you short a stock and a bankruptcy filing ensues after the fact? If there is no active market to sell the shares, how do you sell the shares to reap the rewards of the share price plunge?
Logistically speaking, what happens if you short a stock and a bankruptcy filing ensues after the fact? If there is no active market to sell the shares, how do you sell the shares to reap the rewards of the share price plunge?
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Sig said:
To close a short position, you don't sell shares on the open market. You replace the shares you borrowed by buying to cover that position. So in essence, you are creating demand for the shares when you cover. If there is no active market, based on your broker, the money is placed into your account as if the stock were trading at 0.
SilverStone05 said:
That was the part I was hazy on.
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SilverStone05 wrote "To close a short position, you don't sell shares on the open market. You replace the shares you borrowed by buying to cover that position. So in essence, you are creating demand for the shares when you cover. If there is no active market, based on your broker, the money is placed into your account as if the stock were trading at 0."
SilverStone05 is correct. When you short a stock, what you are doing is BORROWING the stock from your broker to sell on the day you short it. Hence the term "short". Your account is "short" of a stock you already sold, with the hope of buying it back at a lower price in the future. At some future time, you need to "cover" that short position, meaning buy back the same amount of shares at hopefully a lower price, then return those shares to the broker who lent you the original shares to sell. But the money has already been "credited" to your account on the day you sold. You already have the money. So you just need to buy back the shares to replace the ones you already sold, and if you do buy them back for less than you sold them short for, you pocket the difference. If there is no market in the stock because the company no longer exists in it's original form (take the former USAir stock as an example), after they have filed bankruptcy and trading has been ceased, then you don't have to replace shares that no longer exist. You just keep the money that already has been credited to your account. You collected that money the day you sold short.
Note that stockholders are last in line behind other creditors at a bankruptcy. They lent the company money too, similar to any other creditor, including financial institutions as well as vendors. However, the rules are deliberately stacked to place the stockholder last. But a short seller isn't a stockholder; he or she already sold the stock.
Buying back a stock to "cover" will drive up the price the same way as normal buying, in the same way that selling short drives the price down the same way as regular selling. Supply and demand. When a stock price is declining, that means there is more demand to sell, whether selling a long position or shorting. When a stock price is rising, that means there is more demand to buy, whether buying for a long position or buying to cover.
SilverStone05 is correct. When you short a stock, what you are doing is BORROWING the stock from your broker to sell on the day you short it. Hence the term "short". Your account is "short" of a stock you already sold, with the hope of buying it back at a lower price in the future. At some future time, you need to "cover" that short position, meaning buy back the same amount of shares at hopefully a lower price, then return those shares to the broker who lent you the original shares to sell. But the money has already been "credited" to your account on the day you sold. You already have the money. So you just need to buy back the shares to replace the ones you already sold, and if you do buy them back for less than you sold them short for, you pocket the difference. If there is no market in the stock because the company no longer exists in it's original form (take the former USAir stock as an example), after they have filed bankruptcy and trading has been ceased, then you don't have to replace shares that no longer exist. You just keep the money that already has been credited to your account. You collected that money the day you sold short.
Note that stockholders are last in line behind other creditors at a bankruptcy. They lent the company money too, similar to any other creditor, including financial institutions as well as vendors. However, the rules are deliberately stacked to place the stockholder last. But a short seller isn't a stockholder; he or she already sold the stock.
Buying back a stock to "cover" will drive up the price the same way as normal buying, in the same way that selling short drives the price down the same way as regular selling. Supply and demand. When a stock price is declining, that means there is more demand to sell, whether selling a long position or shorting. When a stock price is rising, that means there is more demand to buy, whether buying for a long position or buying to cover.
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I backed up one truck and filled it, then borrowed (margin) another truck and filled it. I am looking for some puts to put in the passenger seat and trunk of the NSX. I am either gonna make money or get ran over trying.
I am watching out for someone (Kerkorian?), some institution (Morgan Stanley?), or GM itself to apply the short squeeze.
Kerkorian is long more than 54 million shares of GM. So he for sure doesn't want the stock price to decline. However, Kerkorian is currently at the maximum legal long position without needing further SEC approval for Tracinda to buy more stock. So he can't legally buy any more himself and is somewhat encumbered by regulatory requirements. Somehow, there must be some benefit to Tracinda for events to unfold as they are. GM is very tight-lipped about the whole Kerkorian connection, which may be good or bad, but I don't like not knowing either way. Is Kerkorian angling for a substantial stake in the NEW GM? What are they NOT telling? What am I NOT seeing?
How about Morgan Stanley or a similar investment bank? They probably have the bucks to set a bear trap if anyone does. Still, GM is huge with more than 565 millions shares outstanding, and I believe most institutions are selling their shares now, driving the stock price down. I believe it would be very difficult (not impossible) to set a bear trap on such a huge stock, largely because I believe that it would be difficult for a minority of shareholders, say Kerkorian plus some IB with a combined total of say possibly 25 percent of outstanding shares, to go against the other 75%, mostly large institutions, who are selling. (The short interest ratio on GM is very large now, and increasing.) There appears to be underway a very orderly sell-off, which tells me that the large institutions are wisely trying to ease out of their long positions without driving the price down too suddenly. And those who aren't long seem to largely be shorting it. The movement just seems too smooth and stealthy to be driven by the individual investor.
How about GM themselves engaging in a stock buyback? If they are serious about NOT going bankrupt, they would almost certainly do that in the event of a sell-off, either with cash reserves, proceeds from a GMAC sale, Morgan Stanley corporate bond proceeds, or a combination of all three. So it could be done, but it would be expensive. And why drive the stock price up against themselves if they intend to go bankrupt anyway? They need to acquire cash, not burn it. Driving the stock price up would not change anything except the stock price. The underlying troubles would still remain. So I believe that GM believes that the best thing to do is file Chapter 11.
What am I not seeing? Any contrary input is welcome. Will someone please disagree with me as a catalyst for further discussion? Having to defend my ideas sharpens my mind, and may show me where my logic may be flawed.
Actually, I don't want to defend my ideas, I want to get to the truth. If I am wrong I want to know why I am wrong.
I am watching out for someone (Kerkorian?), some institution (Morgan Stanley?), or GM itself to apply the short squeeze.
Kerkorian is long more than 54 million shares of GM. So he for sure doesn't want the stock price to decline. However, Kerkorian is currently at the maximum legal long position without needing further SEC approval for Tracinda to buy more stock. So he can't legally buy any more himself and is somewhat encumbered by regulatory requirements. Somehow, there must be some benefit to Tracinda for events to unfold as they are. GM is very tight-lipped about the whole Kerkorian connection, which may be good or bad, but I don't like not knowing either way. Is Kerkorian angling for a substantial stake in the NEW GM? What are they NOT telling? What am I NOT seeing?
How about Morgan Stanley or a similar investment bank? They probably have the bucks to set a bear trap if anyone does. Still, GM is huge with more than 565 millions shares outstanding, and I believe most institutions are selling their shares now, driving the stock price down. I believe it would be very difficult (not impossible) to set a bear trap on such a huge stock, largely because I believe that it would be difficult for a minority of shareholders, say Kerkorian plus some IB with a combined total of say possibly 25 percent of outstanding shares, to go against the other 75%, mostly large institutions, who are selling. (The short interest ratio on GM is very large now, and increasing.) There appears to be underway a very orderly sell-off, which tells me that the large institutions are wisely trying to ease out of their long positions without driving the price down too suddenly. And those who aren't long seem to largely be shorting it. The movement just seems too smooth and stealthy to be driven by the individual investor.
How about GM themselves engaging in a stock buyback? If they are serious about NOT going bankrupt, they would almost certainly do that in the event of a sell-off, either with cash reserves, proceeds from a GMAC sale, Morgan Stanley corporate bond proceeds, or a combination of all three. So it could be done, but it would be expensive. And why drive the stock price up against themselves if they intend to go bankrupt anyway? They need to acquire cash, not burn it. Driving the stock price up would not change anything except the stock price. The underlying troubles would still remain. So I believe that GM believes that the best thing to do is file Chapter 11.
What am I not seeing? Any contrary input is welcome. Will someone please disagree with me as a catalyst for further discussion? Having to defend my ideas sharpens my mind, and may show me where my logic may be flawed.
Actually, I don't want to defend my ideas, I want to get to the truth. If I am wrong I want to know why I am wrong.
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Sig said:
You put on some very loud music, get naked, and dance around your house for an hour or so playing some mean air guitar. Then the next day you go buy some nice things for your NSX and your significant other.
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After ruminating on the Kerkorian - GM connection, here is what I think is happening. Remember what Carl Icahn tried to do to with TWA more than a decade ago? He busted the "OLD TWA" by taking it into bankruptcy, but got left on the hook for the pension plan despite legal advice to the contrary. I think what is going on now is a version of the same thing; except Kerkorian doesn't go on the hook by taking over the "OLD GM". He works hand-in-glove with GM and the UAW BEFORE the fact, and they get the courts to rule that it is okay for the UAW to negotiate cuts in retiree benefits, etc. etc. They get it all set up IN ADVANCE, letting the courts do some of the lead work, then once it is all set and legal, with favorable rulings, they pull the bankruptcy trigger, dump the retirees, and stiff the vendors and stockholders. After the bankruptcy, Kerkorian ends up with a large stake in the "NEW GM", without actually risking a fortune on the "OLD GM" like Icahn did with the "OLD TWA".
Kerkorian gets a large stake in the new company.
GM realizes huge savings by costs by dumping the pension plan, slashing health care costs, and substantial pay reductions.
The UAW reasons that it is better for some UAW members to get slaughtered, rather than ALL of them. If bankruptcy is inevitable. they cut their losses rather than losing out completely. This comes at a time when the labor movement appears to be fracturing across a broad front. A compliant UAW will have SOME standing within NEW GM. A defiant UAW would go down in flames and very probably end up with no standing in the NEW GM.
Interest in puts is increasing today, the stock price is down further, and short interest is probably increasing as well.
I remain convinced that a bankruptcy is looming.
Kerkorian gets a large stake in the new company.
GM realizes huge savings by costs by dumping the pension plan, slashing health care costs, and substantial pay reductions.
The UAW reasons that it is better for some UAW members to get slaughtered, rather than ALL of them. If bankruptcy is inevitable. they cut their losses rather than losing out completely. This comes at a time when the labor movement appears to be fracturing across a broad front. A compliant UAW will have SOME standing within NEW GM. A defiant UAW would go down in flames and very probably end up with no standing in the NEW GM.
Interest in puts is increasing today, the stock price is down further, and short interest is probably increasing as well.
I remain convinced that a bankruptcy is looming.
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