Downgrades pull GM down 30%
General Motors plummeted 30% after a Deutsche Bank analyst down-graded the shares and cut the price target to zero. GM lost $1.30 to $3.06 at 10:04 am in New York Stock Exchange composite trading.
By Agencies |
NEW YORK: General Motors plummeted 30% after a Deutsche Bank analyst down-graded the shares and cut the price target to zero. GM lost $1.30 to $3.06 at 10:04 am in New York Stock Exchange composite trading. Ford Motor dropped 10 cents to $1.92. Detroit-based GM said on November 7 it may not have enough cash to operate this year.
Another analyst with Barclays Capital said GM is likely to fall below its minimum cash needs of $11 bn to $14 bn in the first quarter of 2009 if the troubled automaker does not receive additional funding. Barclays��� analyst Brian Johnson downgraded GM to ���underweight��� from ���equal weight.��� ���We believe any government assistance would likely significantly dilute GM���s equity,��� said Johnson, who set a share-price target of $1.
Separately, an analyst at JP Morgan Securities said both GM and Ford Motor are likely to receive government aid, even as he widened his loss estimates for both companies after they reported far deeper-than-expected quarterly losses.
���Ford management���s commentary on the third-quarter call as well as GM���s comments raises our optimism that some form of government help is likely given dire Big 3 liquidity,��� JP Morgan���s Himanshu Patel wrote in a note to clients.
While Patel sees a government bailout likely, he expects this would come with significant taxpayer protection measures, suggesting near-term or eventual equity dilution.
On Friday, President-elect Barack Obama said help for the US auto in-dustry was a high priority and urged the Bush administration to do ���everything it can��� to accelerate disbursement of $25 bn of loans to the industry previously approved to make fuel economy improvements.
Another analyst with Barclays Capital said GM is likely to fall below its minimum cash needs of $11 bn to $14 bn in the first quarter of 2009 if the troubled automaker does not receive additional funding. Barclays��� analyst Brian Johnson downgraded GM to ���underweight��� from ���equal weight.��� ���We believe any government assistance would likely significantly dilute GM���s equity,��� said Johnson, who set a share-price target of $1.
Separately, an analyst at JP Morgan Securities said both GM and Ford Motor are likely to receive government aid, even as he widened his loss estimates for both companies after they reported far deeper-than-expected quarterly losses.
���Ford management���s commentary on the third-quarter call as well as GM���s comments raises our optimism that some form of government help is likely given dire Big 3 liquidity,��� JP Morgan���s Himanshu Patel wrote in a note to clients.
While Patel sees a government bailout likely, he expects this would come with significant taxpayer protection measures, suggesting near-term or eventual equity dilution.
On Friday, President-elect Barack Obama said help for the US auto in-dustry was a high priority and urged the Bush administration to do ���everything it can��� to accelerate disbursement of $25 bn of loans to the industry previously approved to make fuel economy improvements.
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