GM plans 1-for-100 reverse stock split

That’ll help get the share price up:

General Motors Corp. said Tuesday it is planning a reverse stock split that would give shareholders one share of new stock for every 100 shares they currently own.
The automaker said in a filing with the Securities and Exchange Commission that the deal would be part of an agreement with the Treasury Department in which the government would assume at least half of GM’s debt in exchange for company shares.
The filing said both sides are still negotiating the terms of the debt swap.
Under GM’s plan, the U.S. government would get a 50 percent equity stake in exchange for about $10 billion in loan forgiveness. The UAW, for its part, would get a 39 percent stake in exchange for $10 billion in payments to its health care trust in stock. GM would issue up to 60 billion shares as a result of the bond exchange, Treasury loan and VEBA agreement.

At this point, wouldn’t it be easier to split the Treasury 100-to-1?

Posted by on May 5th, 2009 at 7:08 pm


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