Six General Motors Corp. executives recently sold more than 200,000 shares of the automaker as GM moves toward issuing new equity to give large stakes to the U.S. government and a United Auto Workers retiree health care trust fund.
Four group vice presidents and two vice chairmen sold nearly 205,000 shares Friday and Monday at prices ranging from $1.45 to $1.61 per share. GM shares closed Monday down 17 cents at $1.44.
Spokeswoman Julie Gibson says the sales don't show a lack of faith in the company. She says GM has disclosed publicly that shareholders run the risk of significant dilution or possibly losing their investments in a potential bankruptcy filing. "They're not operating with any knowledge that other people don't have," she said. The executives had a short window of Friday through Tuesday to sell the shares, she added. GM has offered bondholders 10 percent of the company's equity in exchange for wiping out $27 billion in debt. The company also is negotiating with the U.S. government for a potential 50 percent share of GM stock, and with the UAW to take 39 percent in exchange for half of the $20 billion that the company owes the trust fund. The remaining 1 percent would go to those who hold the company's current 611 million outstanding shares. If the bond exchange goes through, GM plans to issue 62 billion new shares and then do a 100-for-1 reverse stock split. |
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