General Motors CEO, Rick Wagoner, tried to reassure investors today that GM would survive despite losing money and deciding to sell off its Hummer division. Judging by the stock’s reaction, he wasn’t successful.
WSJ: GM Chief Executive Rick Wagoner dismissed the notion that the auto maker may soon file for bankruptcy, and he also said the company has no plans to sell or shutter more of its brands.
“Under any scenario we can imagine, our financial position, or cash position, will remain robust through the rest of this year,” Mr. Wagoner said Thursday while in Dallas to speak to a business organisation. He said the company has plenty of options to shore up its finances beyond 2008, although he declined to outline them.
The comments failed to boost investor sentiment as GM shares fell 6.2% to $9.69 in 4 p.m. New York Stock Exchange composite trading Thursday. The stock has been trading at its lowest levels in more than 50 years as concerns mount about the company’s financial position amid a steep decline in U.S. sales.
(An unsolicited tip for Rick: It’s the “through the rest of this year” part that’s scaring the bejesus out of the market. The end of this year is only six months away. And if you wait that long to raise capital, you’ll bludgeon shareholders so much that bankruptcy might be a better option.)
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