Price target:

From GM shares hit 62-year lows after broker downgrades (emp add)

Shares of General Motors Corp tumbled 24 percent to 62-year lows on Monday after analysts downgraded the automaker, citing cash levels that may fall below the minimum needed in the first quarter of 2009.

Analysts including Barclays Capital to Credit Suisse also warned that while government aid would decrease the risk of a bankruptcy for the No.1 U.S. automaker, any assistance would come at a significant cost to existing shareholders.

Barclays cut GM to "underweight" from "equalweight" and lowered its price target for the stock to $1 from $4. It said GM is expected to end 2008 with $13.3 billion in cash and fall below its minimum the $11 billion to $14 billion in cash needs during the first quarter.

Deutsche Bank cut GM to "sell" from "hold" and lowered its equity value to zero from $4, saying GM may not be able to fund its operations beyond December.

Forget Chrysler, this GM situation is an even bigger problem.

UPDATE: Just checked the quote for GM and noticed that the market cap is just under $2 billion.


posted by Quiddity at 11/10/2008 10:42:00 AM