Author Topic: GM - General Motors  (Read 631045 times)

Gregmal

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Re: GM - General Motors
« Reply #1670 on: May 21, 2019, 09:27:31 AM »
https://www.wsj.com/articles/gms-car-sharing-business-to-end-service-in-eight-of-its-17-north-american-cities-11558382917

Oh just another example of ambitious managements shunning boring old share repurchases to pursue some unnecessary business venture that ultimately incinerates capital...

I use Maven on the Gig side, not car sharing. I think it's a good service. If they can't make money renting their Chevy Bolt to me at $290 a week, I don't know what else to say.

I dont doubt that there is potential here; I dont think any company goes into a venture knowing its a bad idea but does it anyway. My point was moreso to highlight just another example of how a company takes on a riskier venture rather than just keeping it simple and buying back stock.


Gregmal

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Re: GM - General Motors
« Reply #1671 on: May 22, 2019, 10:57:07 AM »
This is just the gift that keeps on giving.....

Ahab

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Re: GM - General Motors
« Reply #1672 on: May 22, 2019, 11:12:17 AM »
I sold out of my position in the B-warrants early this morning. Even though I have a positive long term outlook on the stock (particularly related to Cruise Auto), I think the trade war & SAAR worries will slam the stock some more this year. Looking to establish a position in the Jan 21' LEAPS at a later point..
Long: FNMAT, FNMAN, FMCCL, FMCKO, BAC, JPM, GOOG, JD, MO/PM
Short: PCG, TSLA
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Gregmal

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Re: GM - General Motors
« Reply #1673 on: May 22, 2019, 11:43:59 AM »
I dont disagree. I just have zero confidence in Barra doing anything remotely useful in terms of capital allocation. She is ruining whatever benefits may come from running the business in a respectable fashion. The CEO of a public company should not be clueless when it comes to handling that side of the company.

Ahab

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Re: GM - General Motors
« Reply #1674 on: May 22, 2019, 01:42:29 PM »
I totally agree. It's really disheartening that they have not conducted a larger buyback. In my thinking, conducting sizable buybacks and highlighting the value of Cruise are the two major levers for management to finally push this stock higher.
Long: FNMAT, FNMAN, FMCCL, FMCKO, BAC, JPM, GOOG, JD, MO/PM
Short: PCG, TSLA
Twitter: AhabValue

JRM

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Re: GM - General Motors
« Reply #1675 on: May 22, 2019, 05:11:00 PM »
I threw in the towel (sort of) yesterday, so now is probably the time to buy.  I sold a $35 and $40 strike calls against 2/3 of my position and used the proceeds to buy $30 strike puts against my full position (Jan 2021 expiration); slightly below my original cost basis a few years ago of $32. Worst case scenario I can get out for slightly less than I got in for and collect dividends for 5 years.  Best case 1/3 of my current position goes to infinity and beyond.

hyten1

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Re: GM - General Motors
« Reply #1676 on: May 23, 2019, 01:40:09 PM »
Watch Cruise’s self-driving cars perform 1,400 unprotected left turns in 24 hours

https://www.theverge.com/2019/5/23/18637358/cruise-gm-self-driving-unprotected-left-turn


RadMan24

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Re: GM - General Motors
« Reply #1678 on: May 23, 2019, 06:26:03 PM »
"SAARs may fall off a cliff" & "They're not doing enough buybacks" should not be in the same sentence.

Ahab

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Re: GM - General Motors
« Reply #1679 on: May 23, 2019, 07:54:05 PM »
For what it's worth, I think the mental model of a lot of investors for a SAAR downturn is a 2008-level swoon in auto sales that utterly obliterates auto stocks and leads to many bankruptcies. This has played a significant part in auto stocks treading water in a raging bull market. If GM can weather this downturn in the cycle well, the stock should do really well from its currently low valuation IMO (especially when you throw in the Cruise Auto kicker which may shift market perception of the parent). There is a fine line between buybacks that would leave such a cyclical company leveraged to the hilt and buybacks that would reasonably reward shareholders without imperiling the balance sheet. I suspect we are far below the optimal level of buybacks and the stock has languished in part as a result.
Long: FNMAT, FNMAN, FMCCL, FMCKO, BAC, JPM, GOOG, JD, MO/PM
Short: PCG, TSLA
Twitter: AhabValue