General Motors Corp. has notified its shareholders – a reverse stock split of 1 share for 100 shares held. What it meant is shareholders will basically hold only 1 share for every 100 shares they currently own. It’s a huge loss but then it’s better to have 1% of something than 1% of nothing. Shareholders who are currently holding 610.5 million shares floating in the stock market have no choice but to accept it as part of the agreement with the Treasury Department in order for the government to assume half of GM’s debt in exchange for the company’s shares.
So far GM has received $15.4 billion in U.S. government loans and the government is to own 50% equity stake in GM in exchange to write-off $10 billion of the loan taken, unless GM would like to go into Chapter 11 bankruptcy protection. After the shares restructuring (1 for 100 shares split) General Motors’s floating shares are expected to balloon to a whopping 62 billion shares, roughly 100 times more than current shares. Frankly this is perhaps the best option to ensure the company’s continuous listing in the stock market. At least there’s a chance the shareholders could recover their investment losses when the bull rides again, no matter how distance that is.
When the stock market was doing well, we heard of stock split (or rather bonus issue for that matter) hence naturally the reverse stock split now that the company is in deep trouble *yawn*. Thursday will be another interesting day – the official release of U.S. government stress-test result on major U.S. banks. Thursday is also the day a tiny town, Ipoh, will gains worldwide recognition when assemblymen from both PR (Pakatan Rakyat of People’s Alliance) and BN (Barisan Nasional or National Front) coalitions set to dash for their seats, thanks to the already confusing yet amusing political fight for the state government.
At this moment it’s purely speculation as to what strategies both sides will adopt to ensure they win the control of the assembly. For all you know they may wear Nike sports shoes (no high heels for ladies) since a difference of a split second could determine who gets the seats especially the Chief Minister chairs. It would be hard for PR to prevent the barred illegitimate (as claimed by many Perakians) Zambry and his six executive council members from entering the state secretariat building, let alone preventing them from taking their seats, as the police and other enforcement officers will be there to assists the BN’s assemblymen. On the contrary PR’s Speaker Sivakumar may face difficulties getting to his throne.
Heck, for all you know the scenario could turn out to be a peaceful assembly with Zambry and his boys plus the three traitors (who would most probably sneak in via backdoor) together with the Sultan of Perak allowed into the building while the PR assemblymen forced by the police to have “their” own assembly under another “rain tree” again. A new Speaker would be nominated without much hassle and the BN win the battle. The PR assemblymen, the thousands of their supporters and bloggers would cry and curse till the cow comes home but who cares. Nevertheless it would be interesting to hear what the Ruler has to say in his speech prepared by the BN.
Of course it would be better than orgasm if all the PR’s assemblymen somehow supported the removal of their own Speaker with the Speaker himself admitted defeat and presented the throne to Zambry. This could happen, mind you, since Zambry was accused to have engaged top bomoh (sorcerer?) to cast charming spells in the state secretariat building. Known to be more powerful than Harry Potter, the bomoh could have applied some love portions on PR’s assemblymen seats already so that they would fantasized Zambry was actually Pamela Anderson with the swimsuit on. That would be fun, wouldn’t it? But seriously there’s only one way to save the kingdom of Perak – go back to the people.
Other Articles That May Interest You …
- Cover-Up and Face-Saving – A Rush for the Chairs
- Perak Government – Now You See It, Now You Don’t
- UMNO is big Bully but that’s because PKR-DAP are Babies
- What can Najib do to increase Rating and win Voters?
- We don’t live on trees. We conduct Assembly under the tree
- Perak, PR, BN and Gamuda – It’s all about Business, Stupid
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May 6th, 2009 by financetwitter
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A stock split or stock divide increases or decreases the number of shares in a public company. The price is adjusted such that the before and after market capitalization of the company remains the same and dilution does not occur. Options and warrants are included.