Investor extraordinaire Warren Buffett’s Berkshire Hathaway and some hedge funds have indicated they have sold their shares of General Motors—in some cases completely—in recent months due to recalls involving faulty ignition switches.
Automotive News reports that Berkshire reduced its stake in General Motors by 25 percent through the first quarter of 2014, while Greenlight Capital Inc. sold all of its 17 million shares.
“While a number of factors have pushed GM stock downward recently, the controversy around the ignition switch recall appears to have had a chilling effect, and has underscored the idea that despite attractive valuation, GM might perpetually be a value trap,” says Barclays Plc analyst Brian Johnson in a May 14 report.
But it’s not all doom and gloom for General Motors in the investor world—Appaloosa Management LP raised its holdings to about 7.9 million shares, and Hayman Capital Management LP increased its position in GM by 54 percent to about 7.1 million shares.
General Motors shares closed at $34.36 yesterday, a drop of 1.7 percent.