GM Shares Drop to Lowest Price Since 1934
By Michelle Krebs February 23, 2009General Motors' shares sunk to their lowest price in 74 years on Friday, as the stock market
in general fell and nagging questions about GM's future arose.
At one point on Friday, GM shares fell to $1.52, the lowest level since July 26, 1934. The price rebounded some, to close at $1.77, a nearly 12 percent drop.
Friday's drop briefly sent GM's market capitalization below $1 billion; in other worse news, GM was worth less than $1 billion based on the value of outstanding shares.
The stock drop to under $2 a share complicates GM's negotiations with bondholders and union members. GM wants to swap debt for stock equity with bondholders and cash it owes the United Auto Workers union's retiree health care fund -- or VEBA -- for equity. The cheap and falling stock price make that a risky trade for bondholders and union workers.
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