Would you guys recommend to buy MOTORS LIQ CO (MTLQQ)?
August 13, 2009 1:32 PM   Subscribe

Can I buy MOTORS LIQ CO (MTLQQ) AKA General Motors stock? If yes, Would you guys recommend to buy the stock? Whatever your answer I need to know the reason. Thank You
posted by omaralarifi to Work & Money (20 answers total)
If it's traded on a market, you can buy it. I wouldn't, though. It's worthless and the price only fluctuates from the daytraders. When GM emerges from this, these shares will be cancelled, and new stock will be issued in the new company.
posted by hwyengr at 1:42 PM on August 13, 2009

Response by poster: what do you mean When GM emerges from these shares will be cancelled?
posted by omaralarifi at 1:47 PM on August 13, 2009

Of course you can, it's a pink sheet...

Not sure what the incentive to buy is, I don't know the business plan. Will this company pay dividends after bankruptcy auctions?
posted by teabag at 1:57 PM on August 13, 2009

It is incorrect to refer to Motors Liquidation Company as being "also known as" General Motors. It was formerly known as General Motors, but it sold the rights to the name, along with most of its other assets, to a new entity now known as "General Motors Company." The new entity is not publicly held, so you cannot buy stock in GM anymore. As for buying stock in MTLQQ, their web site says:
Management continues to remind investors of its strong belief that there will be no value for the common stockholders in the bankruptcy liquidation process, even under the most optimistic of scenarios. Stockholders of a company in chapter 11 generally receive value only if all claims of the company's secured and unsecured creditors are fully satisfied. In this case, management strongly believes all such claims will not be fully satisfied, leading to its conclusion that the common stock will have no value.
StreetInsider.com provides some explanation.

In short, buying MTLQQ is not a great idea.
posted by grouse at 2:03 PM on August 13, 2009 [2 favorites]

No profit, no dividend. Can't see it as being anything but money down a hole.
posted by torquemaniac at 2:04 PM on August 13, 2009

MTLQQ isn't the 'new' General Motors, it's the 'old' General Motors. So it's better to call it the bankruptcy estate of the former company. But G.M. — both old, now known as the Motors Liquidation Company, and new — have said repeatedly that the stock is almost guaranteed to be worthless. From the same article: The new G.M., created through a bankruptcy sale, is privately held and has no publicly traded stock. So no, you can't buy a share of the 'new' GM.
posted by persona at 2:05 PM on August 13, 2009

MTLQQ's only value is its ownership in the new enterprise, which I believe is a 10% position.

Going into BK GM listed its assets amounting to $82.29 billion and liabilities amounting to $172.81 billion.

It's a coinflip whether there will be any residual value in the liquidation. Investing should be taken with known risks, not throwing money at something and hoping it works. Stay away.
posted by @troy at 2:16 PM on August 13, 2009

Response by poster: So, if I DON'T sell my stocks (MTLQQ) NOW I will get nothing $0.00?!
How long MTLQQ stocks will be in the market?
What will happen when MTLQQ stocks ends (not in the market) will I get some value?
I need more clarification please.
posted by omaralarifi at 2:18 PM on August 13, 2009

Your MTLQQ stocks are worth ~90 cents a share. Do you think the value will rise? If so, keep them. Do you think the value will fall? If so, sell them.
posted by torquemaniac at 2:28 PM on August 13, 2009

Dude, if you do sell your MTLQQ, you'll still get no value. It's hosed. The company is bankrupt.

As several people have already told you: the stock is almost guaranteed to be worthless. You are not going to see value off those stocks. They are valueless and likely will remain valueless. NO VALUE. I'm not sure how to be clearer.

See this:

Q: Is my G.M. stock worth anything?

A: Those certificates (if you have them) make a nice souvenir, but shares of old G.M., for the most part, are now worthless.

posted by DarlingBri at 2:30 PM on August 13, 2009

If you sell your shares now, you'll get .90 a share.

The closer they get to completely winding down the company, the less those will be worth.

Once the bankruptcy is complete, they'll be worthless.

Get out now, if you can.
posted by Oktober at 2:40 PM on August 13, 2009

Frame them and sell them on eBay. Or better yet, frame them and put them in the attic so your grandkids can sell them on eBay for more than their face value ever was. I'm serious.
posted by CunningLinguist at 5:47 PM on August 13, 2009 [1 favorite]

If you have money to invest, there are many options which have a much brighter outlook for ROI in the long and short term. Instead of worrying about whether to keep that stock, figure out what is the best investment you can make with the cash equivalent value of what you have and then put that money in that investment - probably an index fund, at the moment.

(I'm not an investment advisor. Neither is AskMe.)
posted by mikewas at 6:22 PM on August 13, 2009

Response by poster: When is the bankruptcy?
posted by omaralarifi at 3:30 AM on August 14, 2009

General Motors Company (the Good GM) has exited bankruptcy, while MTLQQ is, well, liquidating.

Again, some people are willing to take a bet for .90 a share that somehow, miraculously, the liquidation company will find enough money to pay shareholders. Considering that GM itself has repeatedly denied this, as well as the fact that their debts are nearly double their assets, I wouldn't take this bet. I'd get rid of whatever shares I had left as soon as possible.
posted by Oktober at 7:14 AM on August 14, 2009

What would happen if you bought a put on them?
posted by Debaser626 at 7:27 AM on August 14, 2009

What would happen if you bought a put on them?

You'd have to find someone who'd be crazy enough to sell one, first. Or put another way, the price of the put would should reflect the value of the put.
posted by Pants! at 9:44 AM on August 14, 2009

A few weeks ago I was looking to learn more about my bank's on-line investing program, so I bought a teeny chunk of GMGMQ as a trial run - once it became clear that the transition to MTLQQ was imminent, I got the hell out of Dodge and pocketed a few hundred bucks. Despite the Liquidation Company's recent rally, I regret nothing - it's a company composed entirely of liability and will go nowhere - basically, any MTLQQ activity is like laps run by a headless chicken. It's not a viable long-term investment, so you need to look back at how much you paid initially and figure either what sort of gain or loss you are most comfortable with.
posted by Alvy Ampersand at 10:14 AM on August 14, 2009

You need to educate yourself on stock trading, and in particular trading in shares of distressed (in this case, bankrupt) companies. For instance:

1) As pointed out above, the ticker symbol you mentioned is identified with the company "Motors Liquidation Company" which only exists to liquidate General Motors.

2) "liquidation" means winding down the operations and distributing the assets to any remaining stakeholders

3) What happens to shares of a company after it files Chapter 11

4) The general rule in Chapter 11 bankruptcy is that equity (i.e., stock holders) are "last in line" and every creditor must be made whole before equity can get any distribution. Since the point of bankruptcy is that you can't afford to pay your creditors, you do the math.

5) In general, it is not a good idea to trade in shares with Q at the end of the ticker symbol unless you Know What You Are Doing. (QQQQ being the exception)
posted by rkent at 8:23 PM on August 15, 2009

In today's news.
posted by nomisxid at 1:28 PM on August 21, 2009

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