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Speculators finally get the message on 'old GM' shares

July 16, 2009 | 12:32 pm

It shouldn't have taken this long, but speculators in shares of the old General Motors Corp. at last seem to understand that the stock is worthless. It just took a two-day suspension of trading -- and a change in the ticker symbol.

Shares of old GM -- now called Motors Liquidation Co. -- plunged as low as 35 cents today on the pinksheets.com market, down from 55 cents at the close on Wednesday and down from $1.15 on Friday.

The new General Motors emerged from bankruptcy court protection on Friday. That same day the stock jumped 37% to $1.15. But that made no sense, because the remaining shares outstanding no longer had anything to do with the newly reorganized company.

Rather, the stock represents the "bad" assets of old GM, which will be liquidated over time to pay off creditors. As the company has said repeatedly, it didn’t believe anything would be left for shareholders after the liquidations were completed.

Apparently angered by penny-stock touters who were recommending the stock to investors, securities regulators at the Financial Industry Regulatory Authority stepped in on Friday, halting trading in old GM before the closing bell and issuing a warning about the shares. They kept the stock suspended on Monday and Tuesday.

When it reopened for trading on Wednesday as Motors Liquidation -- with the new ticker MTLQQ -- it immediately sank.

Eventually, Motors Liquidation stock will be canceled. Until then, it will remain a playground for speculators -- but at least for now at prices much closer to its probable ultimate value of zero.

-- Tom Petruno

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