Submitted by Yi-Wyn Yen04.07.2009
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This prediction is closed and has been judged.
General Motors is reportedly in preparations to file for bankruptcy. Under bankruptcy protection, GM would form a new company with its most successful assets. The new CEO of GM, Fritz Henderson, publicly admitted that a bankruptcy filing is a possiblity, but would prefer to restructure outside bankruptcy court.
Chrysler is in worse shape. Moody's reports that Chrysler is at a higher risk to file for Chapter 11 than GM. The ratings agency puts the likelihood of at least one U.S. automaker filing for bankruptcy at 70%.
Ford is the only company among the Big Three to not take federal bailout loans so far.
On March 30, the Obama administration denied additional bailout money to both Chrysler and GM. President Barack Obama ordered Chrysler to complete a proposed alliance with Italian automaker Fiat in 30 days. GM was given 60 days to put together a restructuring plan with significant cost savings.
Prediction: Chrysler and/or General Motors files for bankruptcy protection by June 1, 2009. Only one of the two automakers needs to file for this prediction to be judged favorably.
Price History
Prediction Statistics
| Betting Closes: | Jun 01 2009 | Current Consensus: | 85.81% | Total Bets: | 41 |
| Today's Change: | 33.31% | ||||
| Life Time High: | 90.47% | ||||
| Life Time Low: | 38.94% |
Comments
The prediction, http://www.thestandard.com/predictions/u-s-big-three-automakers-remain-i..., already covers this.
@David, great point. But since it's already active, we'll just have to let it run. So place those bets!
U.S. to give Chrysler, GM new aid:
http://www.reuters.com/article/topNews/idUSTRE53K0KU20090421
At the same time, I've been reading lots of stories in the WSJ about bankruptcy, and today GM said it won't be able to make a June credit payment:
GM: We won't make June debt payment
Ian Lamont
Managing Editor
The Industry Standard
twitter.com/ilamont
On top of that, according to the AP, GM is going to be shutting down most of its factories this summer for 9 weeks now instead of two.
Here's a case where I think GM is going to have to do it, but not by the defined date of June 1. Possibly some time in June, however.
I am holding 2000 shares of GM bought at $2.00 a share and current value $1.66+/-. I can not believe an icon such as GM could go bankrupt; or am I really that naive? Usually I would buy more shares of a stock falling that I believe will recover... But, in this case I am not sure anymore.
haha, now this just made me smile! What a shrewd negotiation technique from the US Treasury Department! (last paragraph)
NEW YORK (AP) -- The Treasury Department has made a new offer to Chrysler LLC's lenders, asking banks and hedge funds that hold $6.9 billion in debt to forgive $5.4 billion and take a 5 percent stake in a Chrysler-Fiat alliance, according to two people familiar with the matter.
The offer was made to the group late Tuesday, these people said. The people asked not to be named because the negotiations are private.
The Treasury Department's proposal is in response to the lenders' offer earlier this week to forgive $4.5 billion in Chrysler debt in exchange for a 40-percent stake in the alliance.
(source: http://finance.yahoo.com/news/Business-apf-15018931.html?.v=1)
@David, I see that no matter how much cash I throw, you keep bringing it back up! :)
@Lev, consider an opportunity to make a huge gain betting against. However, before you do that, you might want to consider the following news ...
http://www.msnbc.msn.com/id/30366383/
http://news.yahoo.com/s/nm/20090413/bs_nm/us_autos_gm
http://www.reuters.com/article/businessNews/idUSTRE5363ZM20090407?feedTy...
http://online.wsj.com/article/SB124041946006244177.html
http://www.washingtonpost.com/wp-dyn/content/article/2009/04/20/AR200904...
http://online.wsj.com/article/SB123841609048669495.html
@David, I was considering these news, but the question for me was When, rather than If. I was speculating on whether these automakers would hold on until at least the 1st of June. With every hour, though, it is getting unlikelier.
NEW YORK (AP) — With Chrysler LLC appearing increasingly likely to seek bankruptcy protection, members of Congress are calling for an orderly process that saves the company from liquidation.
...
Chrysler would file for bankruptcy even if it reaches an agreement with its lenders and Fiat, but if the deals fall through, the company would begin the process of liquidation, the Journal reported, citing several people familiar with the matter.
http://www.google.com/hostednews/ap/article/ALeqM5hktj5QRHLZw1POuhJFjybM...
I don't think June is possible for Chrysler, and maybe not even for GM. I'll keep an eye peeled this weekend and judge the prediction if an announcement is made for Chrysler.
Ian Lamont
Managing Editor
The Industry Standard
twitter.com/ilamont
Judged, based on news that Chrysler has indeed filed for bankruptcy:
http://www.nytimes.com/2009/05/01/business/01auto.html?hp
Ian Lamont
Managing Editor
The Industry Standard
twitter.com/ilamont
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