# What happens to my GM stock now?
**URL:** https://boards.straightdope.com/t/what-happens-to-my-gm-stock-now/498421
**Category:** Factual Questions
**Created:** [June 1, 2009, 10:54pm UTC](https://boards.straightdope.com/t/what-happens-to-my-gm-stock-now/498421 "2009-06-01T22:54:08Z")
**Posts on this page:** 15
**Page:** 1
### Author:  [@Ronald\_C.Semone](https://boards.straightdope.com/u/Ronald_C.Semone)
#### Post date: [June 1, 2009, 10:54pm UTC](https://boards.straightdope.com/t/what-happens-to-my-gm-stock-now/498421/1 "2009-06-01T22:54:08Z")
Now that the the United States has in effect nationalized General Motors, what happens to the GM stock I own? Does some of that umpteen zillion dollars the Government is using to buy GM get redistributed to me? Who decides how much?
And the President said that he expects in not too many years the company will be returned to private control. In that event, who will get the stock? If I am an old stockholder, will I get first crack at it?
---
### Author:  [@friedo](https://boards.straightdope.com/u/friedo)
#### Post date: [June 1, 2009, 11:05pm UTC](https://boards.straightdope.com/t/what-happens-to-my-gm-stock-now/498421/2 "2009-06-01T23:05:52Z")
GM is bankrupt; the stock is worthless.
---
### Author:  [@gazpacho](https://boards.straightdope.com/u/gazpacho)
#### Post date: [June 1, 2009, 11:36pm UTC](https://boards.straightdope.com/t/what-happens-to-my-gm-stock-now/498421/3 "2009-06-01T23:36:21Z")
> [@friedo](#):
>
> GM is bankrupt; the stock is worthless.
Yet strangely the stock is still trading at 75 cents today. There are still a lot of people out there that think that the shareholders will get something out of the bankruptcy deal.
---
### Author:  [@Ronald\_C.Semone](https://boards.straightdope.com/u/Ronald_C.Semone)
#### Post date: [June 1, 2009, 11:54pm UTC](https://boards.straightdope.com/t/what-happens-to-my-gm-stock-now/498421/4 "2009-06-01T23:54:28Z")
> [@friedo](#):
>
> GM is bankrupt; the stock is worthless.
This is what I thought, but in all the articles I have read and radio/TV stories I have heard about the bankruptcy, I haven’t seen any attention being given to the poor stockholders across the country who are going to lose their investment. There has been a lot of talk about the impact on the auto workers who, presumably, can get another job, but no attention paid to the impact on run-of-the-mill investors who will have no way to recoup their investment. Or am I missing something?
---
### Author:  [@Cerowyn](https://boards.straightdope.com/u/Cerowyn)
#### Post date: [June 1, 2009, 11:56pm UTC](https://boards.straightdope.com/t/what-happens-to-my-gm-stock-now/498421/5 "2009-06-01T23:56:39Z")
My understanding is that a new entity will be formed to take over the assets of the “current” GM, and that the stock will be worthless once that process is complete as part of the bankruptcy. This is why the U.S. government and UAW trust will be holding so much of GM after the bankruptcy, without having to get shareholder approval or purchase shares from existing shareholders.
---
### Author:  [@Caldazar](https://boards.straightdope.com/u/Caldazar)
#### Post date: [June 2, 2009, 7:08am UTC](https://boards.straightdope.com/t/what-happens-to-my-gm-stock-now/498421/6 "2009-06-02T07:08:04Z")
> [@Ronald\_C.Semone](#):
>
> Now that the the United States has in effect nationalized General Motors, what happens to the GM stock I own? Does some of that umpteen zillion dollars the Government is using to buy GM get redistributed to me? Who decides how much?
>
> And the President said that he expects in not too many years the company will be returned to private control. In that event, who will get the stock? If I am an old stockholder, will I get first crack at it?
Your stock will likely become worthless. According to an SEC filing, the tentative deal reached allocates the common equity of the new company as follows:
72.5% U.S. Treasury
17.5% Voluntary Employee Beneficiary Association
10% “Old GM” (the current company that has declared bankruptcy)
However, bondholders have senior claims to that 10% of the new company, and GM had a lot of outstanding liabilities ($175 billion USD or thereabouts against only $90 billion in assets). The bondholders will likely eat up all of that 10% of the new GM, leaving nothing for the current GM shareholders.
See [the Form 8-K SEC filing](http://www.sec.gov/Archives/edgar/data/40730/000119312509119940/d8k.htm) for additional details.
---
### Author:  [@Caldazar](https://boards.straightdope.com/u/Caldazar)
#### Post date: [June 2, 2009, 7:17am UTC](https://boards.straightdope.com/t/what-happens-to-my-gm-stock-now/498421/7 "2009-06-02T07:17:52Z")
Assuming the new company survives, the Treasury will likely want to sell off its shares of the new company to recoup its costs in this bankruptcy.
---
### Author:  [@UDS](https://boards.straightdope.com/u/UDS)
#### Post date: [June 2, 2009, 7:52am UTC](https://boards.straightdope.com/t/what-happens-to-my-gm-stock-now/498421/8 "2009-06-02T07:52:27Z")
> [@Caldazar](#):
>
> Assuming the new company survives, the Treasury will likely want to sell off its shares of the new company to recoup its costs in this bankruptcy.
But presumably they will sell them to the highest bidder. **Ron C. Semone** as a stockholder in the former GM will have no prior or advantageous rights of purchase.
---
### Author:  [@dtilque](https://boards.straightdope.com/u/dtilque)
#### Post date: [June 2, 2009, 9:27am UTC](https://boards.straightdope.com/t/what-happens-to-my-gm-stock-now/498421/9 "2009-06-02T09:27:06Z")
> [@Ronald\_C.Semone](#):
>
> what happens to the GM stock I own?
You have a room that needs wallpapering?
---
### Author:  [@smiling\_bandit](https://boards.straightdope.com/u/smiling_bandit)
#### Post date: [June 2, 2009, 2:34pm UTC](https://boards.straightdope.com/t/what-happens-to-my-gm-stock-now/498421/10 "2009-06-02T14:34:29Z")
> [@UDS](#):
>
> But presumably they will sell them to the highest bidder. **Ron C. Semone** as a stockholder in the former GM will have no prior or advantageous rights of purchase.
Worse - if they do sell off, the sheer scale of the dump will drive down the value of GM stock. _A lot_. On the bright side, they may not bother to sell because it’s barely worth the paper it’s printed on.
---
### Author:  [@gazpacho](https://boards.straightdope.com/u/gazpacho)
#### Post date: [June 2, 2009, 3:38pm UTC](https://boards.straightdope.com/t/what-happens-to-my-gm-stock-now/498421/11 "2009-06-02T15:38:06Z")
GM has been delisted from the New York Stock Exchange. It is now GMGMQ.
[http://www.freep.com/article/20090602/BUSINESS06/906020313/1019/BUSINESS/GM+s+stock+shows+brief+surge](http://www.freep.com/article/20090602/BUSINESS06/906020313/1019/BUSINESS/GM+s+stock+shows+brief+surge)
> [@](#):
>
> “The common shareholders are wiped out,” said Christopher Ruth, chief investment officer for Comerica Asset Management in Detroit.
I wonder who those people were that were buying it at 75 cents a share Monday. The bankruptcy was announced Monday morning. Heck who are the people buying it over the counter today at 68 cents? There are a lot of them so far today 60,000,000 shares have traded.
---
### Author:  [@Markxxx](https://boards.straightdope.com/u/Markxxx)
#### Post date: [June 2, 2009, 3:57pm UTC](https://boards.straightdope.com/t/what-happens-to-my-gm-stock-now/498421/12 "2009-06-02T15:57:50Z")
Even with a right of advantage, once you go into bankruptcy the company, subject to the judges OK, can do what it wants. That’s the idea behind bankruptcy.
Look at Chrysler. All those people went out on a limb and had the right to be paid back first and the the judge said “So,” and denied their claims.
This isn’t a rap on Chrysler or the judge, it happens all the time. Well not all the time but it happens enough to get people talking about changing the bankruptcy laws again
---
### Author:  [@yabob](https://boards.straightdope.com/u/yabob)
#### Post date: [June 2, 2009, 4:35pm UTC](https://boards.straightdope.com/t/what-happens-to-my-gm-stock-now/498421/13 "2009-06-02T16:35:39Z")
> [@gazpacho](#):
>
> Yet strangely the stock is still trading at 75 cents today. There are still a lot of people out there that think that the shareholders will get something out of the bankruptcy deal.
> [@](#):
>
> I wonder who those people were that were buying it at 75 cents a share Monday. The bankruptcy was announced Monday morning. Heck who are the people buying it over the counter today at 68 cents? There are a lot of them so far today 60,000,000 shares have traded.
A great deal of the action in the last few days of listing on NYSE was probably short covering. Not an uncommon occurrence in this sort of situation. People with short positions wanted to cover and walk away before the stock went onto pink sheets (GM is now GMGMQ.PK - on the NASDAQ, the fifth Q letter indicates BK proceedings, and the pink sheets seem to use similar codes.)
---
### Author:  [@Sunspace](https://boards.straightdope.com/u/Sunspace)
#### Post date: [June 2, 2009, 4:42pm UTC](https://boards.straightdope.com/t/what-happens-to-my-gm-stock-now/498421/14 "2009-06-02T16:42:41Z")
“Pink sheets”?
---
### Author:  [@yabob](https://boards.straightdope.com/u/yabob)
#### Post date: [June 2, 2009, 4:50pm UTC](https://boards.straightdope.com/t/what-happens-to-my-gm-stock-now/498421/15 "2009-06-02T16:50:09Z")
> [@Sunspace](#):
>
> “Pink sheets”?
The so called “pink sheets” is an over the counter market, not to be confused with the OTCBB (OTC bulletin board), which is a different entity.
A good explanation from investopedia:
> **[OTC Pink Overview: Definition, Risks, and Company Types for Smart Investing](https://www.investopedia.com/terms/o/otc-pink.asp)**
>
> Learn about the OTC Pink Market, its company categories, and risks to empower smart, informed investment decisions in this speculative trading environment.
The major difference between the pink sheets and the OTCBB is that OTCBB traded companies still have to file with the SEC to be listed. The pink sheets do not require this. Companies that go bust often wind up on the pink sheets before the final end. Note that other types of companies trade on the pinks, too, including some very large foreign companies who do not wish to file with the SEC in order to list on a US exchange. Nestles and Volkswagen, for instance.