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I mean, they pay a dividend that is pretty pathetic, and have questionable growth prospects. Interest rates have risen and the economic outlook is uncertain. That means people will buy few cars and cheaper cars. It isn't that there is a risk of them going out of business, it is just that there are much better options on all fronts. If their share price were to increase until their PE was 10, that would put their dividend payout in line with a company like Apple, or Mastercard. Two companies still finding new markets (albeit slower these days for Apple). It would mean they would need to set a new all-time high. The highest they have been was 2021 with extremely low interest rates and high speculation in the market. Their stock just isn't worth it for me.
Captive lending is less about making money and more about moving metal, thus making money for the parent OEM. Like when you see those 0% APR ads for cars (or at least used to see them), it seems counterintuitive because it’s impossible for the lender to make money on that when they have to borrow the funds to lend in the first place, but in reality they are fine with taking the loss on financing if it means the parent company gets their nut on the car sale.
..."strong union" = shitty cars...
I doubt it's because they think they can do it better. A federal judge ruled in early November that it's legal after all for car companies to continue scraping all the text messages and call logs off your phone if you connect it to their infotainment system. There's way too much money to be made by not only making people have paid subscriptions to use the things that cars come with but also selling everything that's on their phone. There are only 14 global corporations that control more than 60 major automotive brands, GM is only the first.
Going private would be interesting as fuck. A car company that could do what it wanted without having to worry about investors could be absolutely amazing, or... produce some batshit crazy cars that are completely out of touch with the market.
> company makes 160 billion a year, twice as much as Tesla and trades for peanuts. on gas cars. If they made 160B on EVs they would be valued much differently. Like if how rotary phone makes could make a smart phone they'd be valuated a little closer to Apple.
There's ALWAYS cash for buybacks. They are hoping to get workers to pay for the honor of making cars someday.
Selling cars to dealerships that can’t sell cars to customers is not a good long term plan
I'm surprised no one on WSB has mentioned it, but this reminds me of [BBBY stock buyback.]( It was very fucking stupid on BBBY and one of the reason why it died despite everyone getting free stimmy money and cheap loans. BBBY doubled down on itself by buying a lot of stock but it's not fucking AAPL so they were buying their own unprofitable meme shares and then collapsed as soon as liquidity got a bit tighter. As you mentioned, it probably helped out a few investors and the board/c-suite to get their payday. Anyways, never liked the US Big 3 or "Big Auto". They've long since devolved from the early Henry Ford days of ingenuity, good build, union jobs, or competing on merit. Bribing/lobbying for shitty infrastructure, allow the dealerships to rise up and lobby dealership monopolies into existence, changing from quality to planned obsolescence to maximize profit, turning to racism and xenophobia when people shifted to Japanese autos that weren't built to fail, fighting electrification and instead pushing SUV COOMsumerism, exporting union jobs overseas and underpaying their workers even as they shill "Support US. Support America!!!" lies, and getting bailouts every downturn be it GFC or Covid since they ~~bribed~~ "donated to the campaigns of" politicians for them to mark these shit companies as "strategically important" in the case of total war scenario where their excess manufacturing capacity "will be needed" when in reality the parts for cars are now globalized, a lot of the work is done in Mexico, and it's the microchips that matter instead of the engines.
You're right, GM is a fucking joke of a company. They're so poor and incompetent that they can't even make decent cars anymore.
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