After all we have been through with the market meltdown, crumbling financial institutions, overleveraged home buyers and irrational exuberance in the stock market. We still have not learned our lesson when it comes to greed and money and we are as dumb as ever. After all this why are people still throwing away their hard earned money buying General Motors stock? Last Monday June 1st GM filed for chapter 11 bankruptcy the new holders of the company will be the government, bond holders and the union. GM was delisted from the DOW and the S & P and was given a new symbol GMGMQ thus trading as a penny stock on the over-the-counter market. Once the company exits from chapter 11 the old shares will be canceled and most likely be worthless and the new GM shares will be divided up among the government, union and bond holders. Despite all this the stock is trading up over 100 percent. Day traders are having a hay day with this stock, however the troubling part is that there are many people who actually believe the old GM shares are worth something. My word of advice no matter how tempting it may be to own shares of GM I would suggest you not buy it if you are a long term investor. If you are a day trader then of course you are going to speculate and take your chances. Save your money and pass on this stock if you don’t believe me wait for about 2-4 months and see where GM is trading. My guess is that it will have exited chapter 11 bankruptcy at that point and the old shares will be totally worthless. As I am typing this I have noticed the stock was trading up to $1.75 and now has fallen to $1.21 if you own it sell and take whatever you can get for the stock. As far as I`m concerned this stock should not be trading, I think at the end of all this there are going to be alot of disappointed people wondering why their stock went to zero.
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