On Friday, it become very apparent to us that the common equity in General Motors (NYSE: GM) will become worthless. We advised shareholders of GM that they have 60 days to sell at whatever price they can. Despite this warning and details from the Treasury’s term-sheet for GM, shares of GM closed up nearly 23%. Absolutely incredible!
Today, Credit Suisse is making a similar case. The firm downgraded GM from Neutral to Underperform and cut the price target to $1, saying the U.S. bailout will mean the complete or near-complete elimination of the existing GM equity. The firm cut their price target from $2 to $1.