Dow Jones Newswires Report on Motors Liquidation Co. Sparks 33% Decline in Shares after Three Weeks of Gains
28 August 2009 - 11:00PM
PR Newswire (US)
- Market-Moving News Clears Up Misperceptions About Company's
Relationship to General Motors Co. - NEW YORK, Aug. 28 /PRNewswire/
-- On August 12, 2009, Dow Jones Newswires reported on the
rationale behind recent gains in the stock of Motors Liquidation
Co. (Pink Sheets: MTLQQ), formerly General Motors. The stock, which
had been trading below 30 cents as recently as late July, had risen
another 6% early that day to $1.17, but the Dow Jones report
highlighted just how irrational the recent gains were. Within 90
minutes of the release of the Dow Jones story, the shares fell to
75 cents and closed 33% lower at 73 cents. Motors Liquidation,
which is winding down former GM assets in bankruptcy court, had
seen its share price triple over the previous three weeks largely
due to optimism about news, including developments related to the
government's Car Allowance Rebate System, also known as cash for
clunkers, which would stand to benefit the new GM that emerged from
bankruptcy in July. The article noted that the fate of the new GM,
which isn't publicly traded, has no bearing on the outlook for
Motors Liquidation, clearing up the misperception that MTLQQ
referred to GM. In fact, as the article noted, FINRA, the
Securities & Exchange Commission and online brokers had all
warned investors about the risks associated with investing in
Motors Liquidation. The company itself, on the front page of its
Web site, said there will likely be no value for stockholders,
"even under the most optimistic of scenarios." More than 435,000
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