Wednesday, November 12, 2008
General Motors
Summary at the end as usual.
Well, basically, everyone knows about General Motors, right?
A bailout would require probably USD50billion, I guess. You might think my figures are wrong, but let’s face it, look at AIG, it is obvious that even the best economists and financial guys have no idea what a bailout will end up costing. But, I’m basing this on the fact that they burnt through 6.9b in 1 quarter. It looks like the automobile industry might take years before recovering. As I said, it’s just a guess on my part.
However, letting GM go under is not really an option either. They are estimating (maybe overestimating) that GM going bust would mean a loss of 2.5million jobs in America. Oh dear. That’s not good at all, especially in a recession! … The thing is… it has been stated that EVEN WITH a bailout, many many jobs will be lost. There’s just too much excess production capacity.
Anyhow… there is a 3rd option that I have come up with. It’s cheap, and it’ll save the most jobs too!
Nationalize General Motors.
Why not? It’s practically a household American name anyhow. It’s not really doing that well profit wise. Most importantly, at the current share price, IT WILL ONLY COST USD1.6BILLION.
Yeah. We’ve reached the point that a bailout for GM, instead of being like 10% of the company’s value, or even 50%, is in fact more than 10 times.
So, it is the cheapest and most effective measure at this point for US government to just force a mandatory purchase of GM. Heck, they can even afford to give current shareholders a 50% premium on the market price. It’ll still cost under 3b, which is WAY WAY WAY cheaper than any bailout could ever be for GM.
Everyone in Malaysia talks about taking companies private when the share price is too low. In fact, GM is currently the best candidate to be taken private. But ONLY if it’s by the American Government. Unless… well, maybe Warren Buffet used up his warchest too fast? hahaha, but he’s still got plenty of money left. Buffet, put your money where your mouth is and BUY AMERICAN. This is the patriotic thing to do!
Summary: US goverment should just buy up all outstanding General Motors shares, and nationalize the company. It’s CHEAP and EFFECTIVE!
Well, basically, everyone knows about General Motors, right?
A bailout would require probably USD50billion, I guess. You might think my figures are wrong, but let’s face it, look at AIG, it is obvious that even the best economists and financial guys have no idea what a bailout will end up costing. But, I’m basing this on the fact that they burnt through 6.9b in 1 quarter. It looks like the automobile industry might take years before recovering. As I said, it’s just a guess on my part.
However, letting GM go under is not really an option either. They are estimating (maybe overestimating) that GM going bust would mean a loss of 2.5million jobs in America. Oh dear. That’s not good at all, especially in a recession! … The thing is… it has been stated that EVEN WITH a bailout, many many jobs will be lost. There’s just too much excess production capacity.
Anyhow… there is a 3rd option that I have come up with. It’s cheap, and it’ll save the most jobs too!
Nationalize General Motors.
Why not? It’s practically a household American name anyhow. It’s not really doing that well profit wise. Most importantly, at the current share price, IT WILL ONLY COST USD1.6BILLION.
Yeah. We’ve reached the point that a bailout for GM, instead of being like 10% of the company’s value, or even 50%, is in fact more than 10 times.
So, it is the cheapest and most effective measure at this point for US government to just force a mandatory purchase of GM. Heck, they can even afford to give current shareholders a 50% premium on the market price. It’ll still cost under 3b, which is WAY WAY WAY cheaper than any bailout could ever be for GM.
Everyone in Malaysia talks about taking companies private when the share price is too low. In fact, GM is currently the best candidate to be taken private. But ONLY if it’s by the American Government. Unless… well, maybe Warren Buffet used up his warchest too fast? hahaha, but he’s still got plenty of money left. Buffet, put your money where your mouth is and BUY AMERICAN. This is the patriotic thing to do!
Summary: US goverment should just buy up all outstanding General Motors shares, and nationalize the company. It’s CHEAP and EFFECTIVE!
Labels: General Motors
Jasonred79 invested at
11:48 PM
1 Comments
1 Comments:
interesting thought, out of the box and and indeed a good plan.
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