I have never understood this and really don’t understand why people aren’t screaming bloody murder if what I think is correct.
from what I read this is what’s happened.
1) GMC declared bankruptcy and all the stock holders lost a bundle of cash.
2) the Government propped it up with Billions of dollars.
3) now they are declaring an IPO?
what the heck about the prior stock holders.
this makes no sense!!!
am I right here?
That’s the way I understand it but I’m no business person.
The Buyer Beware article linked is a good article if you haven’t already read.
Yes you are !!
Wanna guess what your prize is ?
Bondholders’ holdings became worth 10% overnite. I had an IRA worth $38,500 in GM bonds the day before the bankruptcy was initiated and it was worth $3850 the day after. They have already redistributed my wealth and there’s not a thing I can do. And, we did scream bloody murder, but Obama didn’t listen. Of course, there is always the “class action” lawsuit, but it is only going to benefit the lawyers.
In your post, you forgot about the bondholders getting very little and new equity being given to the unions. The bondholders had every right to seniority, and to force liquidation. They were browbeaten by Obama into going along with the settlement, and the bankruptcy judge rubber-stamped it. So there was redistribution from bond investors directly to favored union constituents.