Government Motors curiously loses its CFO, is trading below its IPO price

General Motors is a success story. The government bailout (a little bit of socialism) worked. Why don’t I (and many other critics) just admit that I was wrong and President Obama was right?

For an allegedly successful company, why are there so many changes at the top? On August 15, 2010, I wrote this: GM’s story doesn’t make any sense ($1.3 billion profit & four CEOs).

Now, the Chief Financial Officer of Government Motors has resigned for no apparent reason. From 24/7 Wall St.:

IPO Watch: GM CFO Exit and Busted IPO, Bad For Chrysler (GM, F)
Posted: March 10, 2011 at 1:03 pm
General Motors Company (NYSE: GM) did not do its new shareholders much of a favor today by allowing Chris Liddell to resign this soon after the initial public offering. The former Microsoft Corporation (NASDAQ: CFO) CFO was considered a great asset before, during, and after the Government Motors process. Treasurer Dan Ammann is replacing Liddell after just over a year with Liddell as CFO.
The November-2010 IPO priced at $33.00 per share and today the shares are trading down over 2% at $31.56.
The timing is the issue. A CFO departure right after an IPO does not even allow the lock-up period expiration shares a chance to get out. In the next couple of months you may see many new shares in GM come up for sale. The government has more shares to sell, as do shareholders.

Back on July 30, 2010, I posted here: “Friday NY Times rare gem: ‘G.M.’s Electric Lemon’ (Chevy Volt).” The car is way overpriced at about $43,000, and Obama’s huge taxpayer-funded rebate isn’t helping much to sell this lemon. I’m told that the Chevy Volt needs eight hours to charge to drive about 40 miles–and, oh, don’t even think of running your home air conditioning during that time. Government Motors manufactured a car that no one wants to buy.

Longtime readers of the Zero Hedge blog haven’t fallen for the GM “success story” that the MSM wants to write. This is its latest GM article, but another one might appear today:

Shares Of Bailout Motors Plunge To Lowest Post IPO Price
Submitted by Tyler Durden on 03/07/2011 13:33 -0500
All the Koolaid drinkers who bought the government propaganda and Phil Lebeau’s breathless praises of the world’s worst automaker (and best channel stuffer) are certainly watching today’s inexplicable plunge in GM shares with horror and pure terror. Now that GETCO is out of the picture, having failed to churn the crap out of the $33 IPO price, and keep it at support, ongoing realistic price discovery will soon send shares far, far lower, on both plunging Chinese car demand and dealer “channel stuffing.”

Did someone say “channel stuffing”? From an earlier Zero Hedge:

As GM Continues to Stuff Dealer Channels, Will Government Motors Finally Close Below Its IPO Price?
Submitted by Tyler Durden on 03/01/2011 13:32 -0500
And considering that GM just released its February sales data, which confirmed that the company continues to engage in dealer inventory stuffing, with 517,000 cars held in dealer inventory, compared to 510,000 in January, and 420,000 a year ago, (and the second largest amount in history after the 536,000 in November), the veneer off the world’s most overvalued carmaker is finally starting to come off.

A comment:

by Fourth Horseman…
on Tue, 03/01/2011 – 14:50
GM said that its incentives totaled 13% of the price of the vehicle versus 10.6% for the industry. Most of the incentives are on trucks and SUVs. During 4Q, GM grew car production by 5% but truck/SUV production by over 20%. Not only is the inventory too high but the inventory is the wrong type of inventory in a $4 a gallon gasoline world. GM says they will back off incentives in March. Good luck. Meanwhile, Ford is saying that inventory levels for many trucks and SUVs are down to 2 weeks. And which auto maker is better managed?

We have a lot of bad signs here:

1. GM’s inventory is very high.
2. The Chevy Volt is a dud.
3. GM sells cars by offering huge discounts and generous financing to poor credit risks.
4. The GM inventory is composed of vehicles that won’t sell at high gas prices.
5. GM is already selling at below its IPO price.
6. GM’s CFO has resigned unexpectedly.

I’ll probably update this post later today with stories about the GM CFO resignation. Maybe a few insiders will spill some beans.

There are a lot of red flags to this success story.

The Chrysler bailout numbers look even worse.