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"Why would you invest in GM IPO if you could invest in Tesla instead?" One reason may be that you think GM is underpriced and Tesla is overpriced. Techcrunch o

"Why would you invest in GM IPO if you could invest in Tesla instead?" One reason may be that you think GM is underpriced and Tesla is overpriced. Techcrunch ought to hire people who are financially literate if they are to report on finance.

dandelany 17y ago
Well, technically you're right. However, GM is a massively speculative play, and not an investment in the least. Their business has been declining for years, they're no longer profitable, and they filed for bankruptcy this year. They don't even trade under the GM ticker symbol anymore, they're now "MTLQQ" (Motors Liquidation Company) ever since they went bankrupt. The only reason you'd (or at least I'd) buy GM is because you believe their assets are worth more liquidated than the stock price implies. Tesla, on the other hand, shows tons of promise for actual revenue growth. GM's 2007 high share price: ~$42. 2008 high: ~$29. 2009 high: $4.15. Currently trades for 49 cents. I'd say the author's point, that GM is a total stinker compared to a profitable company like Tesla, is still correct, and shows much more financial literacy than you give him credit for.
- falsestprophet 17y ago
  This is incorrect. MTLQQ is not really GM. GM's valuable assets (the car making and whatnot) have been transferred to a new private company that is owned by the "old GM's" debtholders. This "new GM" is planning an IPO in 2010. It will be a reasonably healthy company and a real candidate for serious investors. So if the author is talking about investing in MTLQQ, then he is totally clueless.
  - dandelany 17y ago
    Ah, you're right, I misread the original statement. I still think an investment in the "new GM" will be a riskier and more speculative play than an investment in Tesla, which is already profitable, but that's just a difference of opinion. On another note, your tendency to end every comment with a rudely worded ad hominem disturbs me.
    - deleted 17y ago
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- netcan 17y ago
  There are two approaches. (1)Invest in companies that are under priced. (2)Invest in companies that are great (growth) companies. There is logic to both. One might even argue that if you find the logic of option 1 compelling you should get out of the stock market. It seems natural that Techrunch, from the tech/startup/IPO/disruptive technology world finds investing philosophy 2 compelling.

dandelany 17y ago

Well, technically you're right. However, GM is a massively speculative play, and not an investment in the least. Their business has been declining for years, they're no longer profitable, and they filed for bankruptcy this year. They don't even trade under the GM ticker symbol anymore, they're now "MTLQQ" (Motors Liquidation Company) ever since they went bankrupt. The only reason you'd (or at least I'd) buy GM is because you believe their assets are worth more liquidated than the stock price implies. Tesla, on the other hand, shows tons of promise for actual revenue growth. GM's 2007 high share price: ~$42. 2008 high: ~$29. 2009 high: $4.15. Currently trades for 49 cents. I'd say the author's point, that GM is a total stinker compared to a profitable company like Tesla, is still correct, and shows much more financial literacy than you give him credit for.

falsestprophet 17y ago
This is incorrect. MTLQQ is not really GM. GM's valuable assets (the car making and whatnot) have been transferred to a new private company that is owned by the "old GM's" debtholders. This "new GM" is planning an IPO in 2010. It will be a reasonably healthy company and a real candidate for serious investors. So if the author is talking about investing in MTLQQ, then he is totally clueless.
- dandelany 17y ago
  Ah, you're right, I misread the original statement. I still think an investment in the "new GM" will be a riskier and more speculative play than an investment in Tesla, which is already profitable, but that's just a difference of opinion. On another note, your tendency to end every comment with a rudely worded ad hominem disturbs me.
  - deleted 17y ago
    [deleted]
netcan 17y ago
There are two approaches. (1)Invest in companies that are under priced. (2)Invest in companies that are great (growth) companies. There is logic to both. One might even argue that if you find the logic of option 1 compelling you should get out of the stock market. It seems natural that Techrunch, from the tech/startup/IPO/disruptive technology world finds investing philosophy 2 compelling.