(Cute Fuzzy Bunny) said:
So much for buying a beaten down stock with a good dividend and being 'paid to wait for the recovery'.
Brewer went on vacation so the GM board probably couldn't reach him to discuss the dividend cut.
UncleMick2, did you get a call or did they not have your new phone number?
Well, anyway, talk me down here. I feel like Warren Buffett looking at an airline stock.
Kirk Kerkorian has his man on the GM board and the board has started implementing his 9.9% "suggestions". One of the first things to go is the dividend, but even at the new dollar per $23 share per year that's still a 4.3% yield. It's not hard to imagine buying a few hundred shares, reinvesting the dividends (Fidelity does that for free) and walking away for a couple years.
One of the next things to go might be GMAC, but GM shareholders would presumably be compensated for holding GMAC shares until the sale.
The company still has plenty of cash and Bob Lutz' creativity. A bankruptcy filing is the only thing that'd break the union, but a BK might also be deemed unecessary?
Of course GM still has plenty of problems, a horrendous burn rate, a severly underfunded pension plan, and turnarounds can take a couple of years-- even when they're done right.
And then there's the stellar examples set by the airline & steel industries.
But still...