WASHINGTON -- Here we go again.
Another major corporate bankruptcy and a once-stellar stock worth less than four rolls of one-ply toilet paper. There's much concern for GM employees, dealers and customers -- and for good reason. But what happens to GM stockholders? Well, let me tell you what's happened to GM stock so far.
On Tuesday, the New York Stock Exchange suspended trading of GM's common stock, saying the delisting was due to the "uncertainty as to the timing and outcome of the bankruptcy process, including the planned sale of substantially all of the company's global assets to a new entity, as well as the ultimate effect of this process on the company's equity holders and creditors."
The Dow Jones industrial average announced it was eliminating GM as one of its tracked stocks. The stock will be dropped from the Dow effective June 8. It will be replaced by Cisco Systems Inc.
"The parlous state of GM has left us with no choice but to remove it from the Dow," said Robert Thomson, managing editor of The Wall Street Journal and editor in chief for all of Dow Jones. "A bankruptcy filing immediately disqualifies a stock regardless of a company's history or its role as a cultural icon."
Getting kicked to the curb ends GM's 83-year position in the Dow. GM was added to the industrial average twice, first in 1915 -- staying on for about a year and a half -- and then again in 1925. The only present company with a longer history in the Dow is General Electric.
Of course, none of this probably matters to the investors still holding GM common shares. As of Tuesday, the 52-week high for the stock was $18.18. The stock traded at a high of 81 cents on that day, then closed at 61 cents with a trading volume of more than 207 million shares.
When companies can't meet the listing requirements to trade on the NYSE or Nasdaq, they are delisted. But shares may still be traded on either the Over the Counter Bulletin Board, otherwise known as OTCBB, or the Pink Sheets, the electronic quotation system and leading provider of pricing and financial information for stocks sold over the counter.
GM stock is listed on the Pink Sheets under the ticker symbol "GMGMQ." The letter "Q" indicates a company is under bankruptcy protection.
In a statement, GM said it would not be "involved in initiating or supporting trading of its stock on the OTCBB or the Pink Sheets."
The company then followed with this: "Stockholders are advised to consult with their personal financial advisers concerning investment decisions and questions concerning how to trade shares."
That's legalese for "You've been warned, buddy. Trade this stock at your own risk."