- The Washington Times - Thursday, July 16, 2009

DETROIT (AP) | Shares of the old General Motors Corp. lost more than half their value Wednesday after the stock symbol was changed to reflect the company’s new name, Motors Liquidation Co.

Trading of GM stock under the symbol GMGMQ had been suspended since Friday afternoon by the Financial Industry Regulatory Authority (FINRA), which regulates over-the-counter stocks. On Wednesday, the authority changed the symbol and allowed trading to resume.

Motors Liquidation shares fell 52 percent to 55 cents.

FINRA suspended trading because investors apparently confused the stock with the new GM, which emerged from bankruptcy protection Friday as a leaner company free of the burdensome debt and contracts that had plagued the old automaker.

The new GM is a private company that is majority owned by the U.S. government. It plans to issue new shares perhaps as early as next year.

“We certainly were concerned that there was confusion in the marketplace that people weren’t sure whether they were buying the new GM when it emerges from bankruptcy or whether they were buying the bankrupt portion of the stock,” said Steve Joachim, executive vice president of transparency services for FINRA.

Motors Liquidation is the old GM, which is still under bankruptcy court supervision. It owns the unwanted assets and the liabilities of the old GM and was set up to sell off the assets to pay creditors as much as possible.

The new symbol, MTLQQ, is designed to avoid confusion with new GM, FINRA said.

The stock had been traded over-the-counter since it was knocked off the New York Stock Exchange when GM filed for bankruptcy protection June 1. But despite warnings from GM that it soon would have no value, trading continued. Trading was suspended Friday after the shares rose 37 percent to $1.15 after GM emerged from bankruptcy protection.

GM spokesman Tom Wilkinson said despite numerous warnings and statements from GM that the stock was likely worthless, GMGMQ continued to climb.

“We were concerned, Motors Liquidation was concerned, I think the regulator was concerned that people were trading the stock not understanding what it was,” Mr. Wilkinson said.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide