Goldman Sachs says sell GM, and they do. Back to the '50s?

It isn’t often that a CEO can lament that his company’s stock price is lower than it was before he was born.

Could that soon be Rick Wagoner’s fate at General Motors Corp.?

The auto giant’s shares traded as low as $11.21 early today, which by Reuters’ reckoning was the lowest since 1955.

Wagoner was born in 1953. So the trend here doesn’t look good for him.

But it isn’t clear to me that the Reuters calculation adjusts for GM stock splits that occurred in 1950 and 1955 (according to Standard & Poor’s). As you might imagine, 50-year-old stock data isn’t easy to come by.

UPDATE: GM today closed down $1.38 to $11.43, a price level the stock last saw late in 1974, according to research firm Global Financial Data in L.A. Before that, you do indeed have to go back to 1954-55 to find GM at this price -- and that includes the adjustment for stock splits and spinoffs, Global Financial Data says.

Investors bailed out of GM today for the eighth time in nine sessions after Goldman Sachs & Co. downgraded the stock to "sell" from "hold." Goldman said it expected GM to burn through so much cash this year and next that the company probably would have to raise fresh capital, "which we believe could lead to significant shareholder dilution and/or a cut to the company’s dividend."

The stock has plunged 54% year to date, and is one of the big reasons why the Dow Jones industrial average is having such a miserable June.

Among the major brokerages, Goldman is alone with its "sell" rating on GM, according to Bloomberg’s tally of analyst recommendations. Merrill Lynch & Co. has a "buy" on the stock, Lehman Bros. rates it "hold" and Citigroup also gives it a "hold," says Bloomberg.

They’re riding this SUV right over the cliff.

Photo: GM CEO Rick Wagoner. Paul Sancya/Associated Press

Comments

[Joseph]

I smell Countrywide here!

[Joseph The Real Estate Guy...]

Greed and Arrogance don't take you far!!!
The Chickens are coming home to roost...

[Rob%20McMillin]

And I quote:

http://online.wsj.com/article/SB114667307035242731.html?mod=home_whats_news_us

"General Motors Corp. Chief Executive Rick Wagoner said Wednesday that the auto maker expects gas prices to eventually fall based on analysis of the current supply and demand equation for oil.

"They are too high right now and they will come back down," Mr. Wagoner said of oil prices during a conference at the company's headquarters in Detroit that was broadcast over the Internet. He said consumer behavior isn't expected to be negatively impacted by current gas prices, which are averaging about $2.92..."

[Cry me a river]

This is what happens when short-sighted GM management ties their fortunes to gas hog SUV sales. That sound you hear is the world's tiniest violin playing for Wagoner

[John]

Wow, reality finally catches up with GM.

Who knew that building mediocre cars that get 15mpg city as the bulk of the business was not a sustainable model for long term success?

Oh, wait, everybody except the big 3.

Adios Wagoner.

[Rev. Dave]

Not to open an old festering sore or anything but it looks like Dan Neil was right about Wagoner's leadership capacity. Zero. In addition to the Big 3 domestic auto makers, you can add Volkswagen to the beyond brain dead list as well. Dump them all in the same financial toilet and flush. Maybe Mr. Tidy Bowl man will see them floating downstream to their final destination.

[Ryan]

Right on, Rev. Dave. Dan Neil for President!

[Steven M]

Rick Wagoner-

Forget the Volt. Build me a hydrogen powered Hummer 2. Set-up the Hydrogen stations at GM sales facilities / dealers, sell a home and portable hydrogen fill-kit

I'll be the first one in line to buy one.

[James%20Sullivan]

It is only a recent trend in American business that completely incompetent managers are rewarded with multi-million dollar paychecks and solid-gold severance packages. If America's executive compensation was linked to their company's performance in the stock market our economy would be in much better shape.
To put it another way: I'm sure that GM and Ford and American Airlines et al could find someone to bankrupt those companies for a lot less than the current batch of nincompoops is getting paid.

[Sycamore]

Given the shameful involvement of General Motors in the demise of electric modes of public transportation in the 1950's and 60's, and the gridlocked consequences of oil dependency we must reckon with today, we should celebrate the auto giant's dwindling outlook. Let GM go the way of the dinosaurs, only once its bones have melted to oil, let's not go to all that trouble to dig them up.