It was confusing enough last week, when GM (GM) shares stubbornly traded over $1 despite it being 100% clear that the equity was going to zilch.
But it gets even more ridiculous, as shares of GM are up 15% after declaring bankruptcy. Folks! The President just said shareholders were going to lose their entire holdings. You get nothing. You lose! Nobody really knows what’s up it seems. Bob Pisani said something about short covering, though it’s not clear why you’d be covering here rather than the inevitable .001. Another possibility is that with GM still in the S&P 500, index funds are still forced to buy it until the day it’s actually out of the index, so money coming into ETFs may be flowing — in part — to GM.
But then, even if you can identify some kind of quirky technical reason for GM trading up, Zero Hedge points to Lear (LEA), a parts supplier that say it will miss a debt payment, and it’s trading up too! So who knows what’s happening there, except maybe it’s some kind of bet on a bailout. Who knows. With action like this, it’s understandable that nobody really trusts this rally, as much as it’s crushing the bears.