Comments on: When bankruptcy is good for bondholders http://blogs.reuters.com/felix-salmon/2009/05/28/when-bankruptcy-is-good-for-bondholders/ A slice of lime in the soda Thu, 23 May 2013 23:51:59 +0000 hourly 1 http://wordpress.org/?v=3.4.2 By: Curmudgeon http://blogs.reuters.com/felix-salmon/2009/05/28/when-bankruptcy-is-good-for-bondholders/comment-page-1/#comment-2131 Curmudgeon Thu, 28 May 2009 19:36:38 +0000 http://blogs.reuters.com/felix-salmon/2009/05/28/when-bankruptcy-is-good-for-bondholders/#comment-2131 I'm curious about the dealership position. The dealers publicized in the press seem to indicate that they cost the auto manufacturer nothing (not sure about that) yet are profitable (I'm getting ready to buy a car from a soon-to-be shuttered Chrysler dealer with that story). I suspect that too many dealerships in the era of the Internet cost them margin on vehicles as customers better comparison shop. But there has to be more to that story. Does anyone care to enlighten? I’m curious about the dealership position. The dealers publicized in the press seem to indicate that they cost the auto manufacturer nothing (not sure about that) yet are profitable (I’m getting ready to buy a car from a soon-to-be shuttered Chrysler dealer with that story). I suspect that too many dealerships in the era of the Internet cost them margin on vehicles as customers better comparison shop. But there has to be more to that story. Does anyone care to enlighten?

]]> By: chappy http://blogs.reuters.com/felix-salmon/2009/05/28/when-bankruptcy-is-good-for-bondholders/comment-page-1/#comment-2130 chappy Thu, 28 May 2009 19:19:47 +0000 http://blogs.reuters.com/felix-salmon/2009/05/28/when-bankruptcy-is-good-for-bondholders/#comment-2130 I'm not sure why you see things this way. The bondholder got the same exchange on their debt. So the only new provision is the warrants that were issued. Other press has reported that these warrants cannot be exercised until GM's market value reaches 15 billion (current market cap is around .75 billion). I'm not sure how to price the option value of these warrants, but I can guarantee that they are worth very little. How long are these bond holders going to hang around? The seems like a lot of new value creation for a company that is struggling so badly. I’m not sure why you see things this way. The bondholder got the same exchange on their debt. So the only new provision is the warrants that were issued. Other press has reported that these warrants cannot be exercised until GM’s market value reaches 15 billion (current market cap is around .75 billion). I’m not sure how to price the option value of these warrants, but I can guarantee that they are worth very little. How long are these bond holders going to hang around? The seems like a lot of new value creation for a company that is struggling so badly.

]]> By: jonathan http://blogs.reuters.com/felix-salmon/2009/05/28/when-bankruptcy-is-good-for-bondholders/comment-page-1/#comment-2126 jonathan Thu, 28 May 2009 16:58:43 +0000 http://blogs.reuters.com/felix-salmon/2009/05/28/when-bankruptcy-is-good-for-bondholders/#comment-2126 I think the prior offer was 10% of the new company. Had to be or it's monkey gibberish. Some of the debt will also carryover to the new GM, which means this was a negotiation all along, not a case of ignoring legal principles but a fairly typical negotiation on a grand scale. I think the prior offer was 10% of the new company. Had to be or it’s monkey gibberish. Some of the debt will also carryover to the new GM, which means this was a negotiation all along, not a case of ignoring legal principles but a fairly typical negotiation on a grand scale.

]]> By: Luis http://blogs.reuters.com/felix-salmon/2009/05/28/when-bankruptcy-is-good-for-bondholders/comment-page-1/#comment-2119 Luis Thu, 28 May 2009 14:58:57 +0000 http://blogs.reuters.com/felix-salmon/2009/05/28/when-bankruptcy-is-good-for-bondholders/#comment-2119 If the govt could give $20 billion to GM, why didn’t they just pay the bondholders first and get of debt? We put more money in and yet they are still going bankrupt? Does this make any sense? This is just a power grab using the govt to confiscate private property and redistribute it to other people (like Chrysler to the Italians). If the govt could give $20 billion to GM, why didn’t they just pay the bondholders first and get of debt? We put more money in and yet they are still going bankrupt? Does this make any sense? This is just a power grab using the govt to confiscate private property and redistribute it to other people (like Chrysler to the Italians).

]]> By: douglas mcintyre http://blogs.reuters.com/felix-salmon/2009/05/28/when-bankruptcy-is-good-for-bondholders/comment-page-1/#comment-2117 douglas mcintyre Thu, 28 May 2009 14:25:43 +0000 http://blogs.reuters.com/felix-salmon/2009/05/28/when-bankruptcy-is-good-for-bondholders/#comment-2117 Felix, Been trying to reach you. Doug McIntyre 24/7 Wall St. Felix,

Been trying to reach you.

Doug McIntyre

24/7 Wall St.

]]> By: douglas mcintyre http://blogs.reuters.com/felix-salmon/2009/05/28/when-bankruptcy-is-good-for-bondholders/comment-page-1/#comment-2116 douglas mcintyre Thu, 28 May 2009 14:25:07 +0000 http://blogs.reuters.com/felix-salmon/2009/05/28/when-bankruptcy-is-good-for-bondholders/#comment-2116 Felix Been trying to reach you. Doug McIntyre 24/7 Wall St. Felix

Been trying to reach you.

Doug McIntyre
24/7 Wall St.

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