GM stock took quite a beating roughly a month ago, when it reported its second quarter 2018 earnings and lowered its forecast by roughly $1 billion in profit as a result of higher commodity prices, which GM has said was not the result of trade tariffs. The stock then briefly recovered some of its value, but is back to tumbling once again.
Shares of the General Motors Company, as traded on the NYSE, closed at $36.13 on August 22nd, 2018 – down $0.79 or 2.11 percent. The value is fast approaching its 52-week low of $34.50.
The “New GM” went public in 2010 at $33 a share, then went on to hit $39.48 per share, until tumbling to $21.78 a share – all in the first 12 months of the Initial Public Offering in 2010. The current value represents a 9 percent increase over the IPO value. But during the same timeframe, the S&P 500 Index has grown over 170 percent. In other words, GM shares have significantly lagged the index.

General Motors LLC Stock Value – August 22 2018 – All Time
But the circumstance is not without hope, as the automaker is looking for several initiatives to boost value and, as a result, share price in the near- to medium-term future. The initiatives include the commercialization of its Cruise autonomous vehicle department as well as newfound profits from the Cadillac luxury division, which has been revitalized in recent years and is planning to launch its bigger product offensive in history.
Here’s to hoping that the efforts have a sizable and tangible impact on the share price that bring it in line with the market.
Comments
Cruise automation will show new roads
no mention of tariffs? seems like the recent stock decline coincided with that.
We addressed this previously. The commodities prices were believed to be caused by trade tariffs, but GM’s CFO dispelled that:
http://gmauthority.com/blog/2018/08/gm-links-growing-commodity-costs-to-market-forces/
That link also says “To that end, GM – along with analysts and economists – believes that increases in domestic commodities prices was caused – in a roundabout way – by the Trump administration’s tariffs on international/imported commodities.”
GM is doing well compared to others.
Ford still is struggling with cost and Fiat is drifting between management changes still looking for a dance partner.
The future is still dependent on technology as that is where investors are. The auto industry is selling themselves through the Consumer Electrinics show more than many auto shows.
Each mfg is searching for the next being break through. Tesla has generated the excitement but with their struggle with mfg the investors will eventually walk on this.
Ford started to excite with Aluminum but with the lack of controls of cost they are now struggling just to get to $10.
As for tariffs they are not helping but I do not see the marketing shifting much yet on that as they understand talks are on going and it will not be long term.
Would the stock prices go up if GM decided to absorb the tariffs increases? By doing so it would drive up sales.