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Old 04-27-2009, 12:40 PM   Nav to Top  #1
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Exclamation BGM - Ballistic or Bust?

For those holding BGM, you've noticed the vertical nature of the price action today...up 38% at noon, and now seems to be fizzling...perhaps early buyers wanted to sell before going to lunch...

I haven't seen any real news about why it should have popped today, except for a GM Analyst Briefing - Restructuring Plan Update Scheduled for today, starting at 12:30 pm Eastern.

Just wondering who all is still holding BGM (or other GM Bond) ?

I'm still holding all at $2.46 and will consider selling half my shares at $4.92, just to get my cash back for more great stockrants plays. ( I anticipate agreed redemption value at $6.25 min, likely $8)
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Old 04-28-2009, 03:55 PM   Nav to Top  #2
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Here's a relevant article

Under the Obamarama plan, " Bondholders will be given 225 shares of GM common stock for each $1,000 in principal amount tendered and will also receive accrued interest in cash. "

***The term principal here concerns me...does that mean that someone who paid $15 for one BGM bond will be issued five times as many GM shares as someone who only paid $3 for one BGM??

Debt for equity swap...bondholders would get potentially worthless paper, existing shareholders get an unbuttered cornholeing...Unions get their medical benefits and equity stakes and King Barry and company owns controlling interest in a car company. (see listing #5 here for a definition of cornholeing)

"The offer is “extremely unattractive,” said Mirko Mikelic, an investment manager at Fifth Third Asset Management in Grand Rapids, Michigan, which manages $14 billion in fixed income and doesn’t own GM bonds. “I’d be surprised if many take this offer. I don’t think bondholders are interested in a 10 percent equity stake. They want control.”

"The proposed debt exchange is also conditional on the U.S. Treasury agreeing to exchange 50 percent of its loans at June 1, estimated to be $10 billion, for stock. The VEBA and the U.S. Treasury would own about 89 percent of the common stock in the reorganized GM after their debt exchanges, the statement said. The remaining 1 percent of stock would be held by GM’s existing common shareholders. "

Anyone care to shed some light on how to evaluate an expected outcome of this agreement for one share of BGM??
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Last edited by Mac; 04-28-2009 at 05:23 PM.. Reason: grammar
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Old 04-30-2009, 11:28 PM   Nav to Top  #3
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see also Lokey's Post
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Old 05-04-2009, 01:53 PM   Nav to Top  #4
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I decided to give everyone who is playing it heads up, it dropped to 1.92 today,
just added another 1k shares. Current position 3.7k shares avrg.@2.08
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Old 05-04-2009, 06:02 PM   Nav to Top  #5
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Thanks sblok....my limit order at $1.85 triggered today, +30% shares, new average at $2.29...next downside limit at $1.55 for another +50%......easy money IMO.

Did you get your interest payment yet? ( I have not )

Also, just in case you haven't seen it, here's an article showing a counterproposal from the bondholders.
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Old 05-04-2009, 07:33 PM   Nav to Top  #6
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nope not yet, cheers for the article ...
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