Statik: Well aren't YOU Little Miss Sunsihine! (lol)GM only has cash from the fire sale of it's assets, of which it has none left. (Think GMAC). If you look at their annual burn rate on cash for the past few years it has been around 8 billion a year....'non-recession'. It's like you being unemployed and selling your car for 20K to keep making payments on your 300k mortgage.
And if GM goes under 10 billion in cash, the stock is worth a dollar, there is widespread panic because everyone knows it can't keep the lights on for more than a year. The only thing floating the market cap at all is it's cash.
It's net tangible assets have gone from 10.2 billion in 05 to -38 billion in 07. They basically sold off all their assets to offset rampant liabilities. Assets went from 476 billion to 148...to pay down liabilities from 461 to 185.
When a company has 24 billion in cash, but it's market capitalization is only 11 billion? It's not good.
Ford is worse, that is true. Sold Jag off to Tata yesturday to pick up almost 2 billion in cash...but much like GM that is a desperation cash grab move.
Chrsyler's fate relies less on market realities and more on the willingness of Cerberus to keep it viable rather than cutting it up and cutting their losses.
