GM Shares Crushed By Analyst Downgrade
In better times, a healthier company would be able to shrug off an analyst's bad report card.
But these are not better times, and GM is not healthy.
So this morning, when Barclays' analyst Brian Johnson downgraded GM to "underweight" from "equal weight," GM stock plummeted.
As of about 11 a.m., shares of GM are trading down more than 20 percent, at about $3.35 per share, a slight rebound from a 30-percent dive earlier this morning.
"While further government assistance would decrease the likelihood of a GM bankruptcy, we believe any government assistance would likely significantly dilute GM's equity," Barclays' wrote in a note to clients.
In its third-quarter earnings report released last week, GM announced it is burning through $2.3 billion in cash per month and is in danger of running out of cash. Despite this, GM chief Rick Wagoner said that bankruptcy is not an option for the troubled U.S. auto giant.
-- Frank Ahrens
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