GM’s survival in question as investors spur between buying and selling
Sam Adelton
Jul. 3, 2008

GM is an interesting investment story at this time. Today’s trading session marked a rebound in General Motors, which in the previous session brought the auto maker's shares to levels not seen in a half-century.

GM trades around $10 and is at a historic low. People used to say as goes GMM so goes US economy. Few people believe that is true any longer. But GM is in real trouble. The fall from $30 to $10 has drawn attention of all investors in the world. Either GM itself is in deep water or it is signaling a major global recession or depression never seen before in the last 100 years.

The investors are spurring over GM. Close to 24 million GM shares trade these days every day. The increasing average volume and lower prices are major concerns. At the same time value players are moving hoping soon GM will be back up in 30s once more.

GM’s biggest problem is the oil price because it is dependent on gas hogged cars and trucks. It is planning to bring in minicars that will easily provide 40 miles a gallon but that vision and mission will take time.

GM’s penetration into Chinese market is strong but at the end the carmaker is performing poorly there too since profit expatriation from China is not that easy. Indian and Chinese markets are lucrative in number of vehicles sold but are lukewarm in terms of revenue and profit because of the lower purchasing power of the population.

In US and Europe, car sells are falling apart very rapidly.

Can GM survive till 2012? That is the biggest question in the minds of people.

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