Sunday, May 31, 2009

Government Motors

It looks like BestView is back from the balmy Bahamas just in time to wallow in the Obama nominee for the Supreme Court and his contrived bankruptcy of GM. Since tomorrow is the day when we all expect GM to enter bankruptcy, this event is one which should be watched closely for an investment opportunity. If you own GM stock now, it will become essentially worthless after the company enters Chapter 11. However, the shell company could well be worth something to some big corporation since it has gobs of losses on the books. Here is the situation:
GM has lost about $69 per share in the last 3 years. That loss is very valuable. It may be a record for any American corporation. Someone will want that corporate shell when all the assets are stripped away. That someone will want it for the loss. For example, Microsoft could buy the GM shell for less than $500 million. The GM tax loss for the last 4 years is almost $32 billion. An analysis by Gerry Sullivan found that based on Microsoft's recent earnings and taxes, the GM tax loss would save MSFT around $9 billion in taxes.
For this reason, GM stock may be worth buying in the near future, but you would have to be out of your mind to buy one of their cars.

Personal Unsecured Loan