Sales Are Up, So Why Is GM Stock Down?
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GM sales increased a very healthy 6.3 percent to 738,638 units sold during the third quarter of 2019. Sales increased at each of the four General Motors brands (Buick, Cadillac, Chevrolet and GMC), with GM’s highly profitable full-size truck models, the Chevrolet Silverado and GMC Sierra, leading the charge with upticks of 16.62 percent and 28.87 percent, respectively. In fact, cumulatively speaking, the two GM trucks outsold those at Ford and Ram. All good news, no doubt about it, and yet GM stock is down.
GM stock tumbled 3.2 percent on Wednesday, October 2nd following the sales announcement, opening the day at $35.77 but finishing the day at $34.62. How can that be? Why are investors blind to the fantastic results that GM just posted?
Perhaps it gets down to the latest United Auto Workers strike. With roughly 50,000 union members participating in a nationwide walkout, maybe it shouldn’t come as a surprise that GM stock value would take a hit.
The strike is currently closing in on the end of its third week, making for the longest nationwide autoworker strike GM has seen in decades. Looking back, we see GM stock tumbling to 37.21 on Monday, September 16th, the day the walkout took effect, dropping 1.65 from the 38.86 posted that preceding Friday. However, the very next day, GM stock bounced back to 38.29, so clearly, investors weren’t completely scared off by the strike. That makes the 3.2 percent sell-off following the third-quarter sales figures that much stranger.
That said, the value decrease may once again get back to the strike, with investors reacting to reports that the UAW and GM are still working to hammer together a new labor contract. Some analysts have reported that GM has lost upwards of $1 billion in potential profits, a figure we think is an oversimplification, but surely something that grabs the attention of wary investors.
Now, with the announcement of the new 2020 Corvette Convertible, we would expect at least a modest bump in GM stock value. Nevertheless, the stock continues to fall, currently standing at 34.38 as of this writing. It’s possible that as soon as GM and the UAW find a solution, the value of GM stock will bounce back up, and bounce back up big time, but so far, a viable solution remains elusive.
We’ll continue to monitor the situation as it develops, so make sure to subscribe to GM Authority for more GM stock news and ongoing GM news coverage.
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The market is in a state of some adjustment right now too. Some people are selling off some stock to reap profits as the economy shows some signs of slowing some.
The Fed is working on another interest cut so it may be just a temp issue. Once the strike is over and with the lower interest GM may get back its traction again.
if you are selling gm stock at this price, i doubt you are reaping very much.
and if the writer thinks the introduction of the convertible c8 is going to bump the stock price, he is mistaken.
https://www.autonews.com/sales/gm-3-4-brands-decline
Read this.
Not sure where their info is coming from…especially since everything in their article states (estimated). But you might want to check out this other article on this very site that states just the opposite.
http://gmauthority.com/blog/2019/10/gm-third-quarter-2019-sales-figures-numbers-results-united-states-q3/
No surprise here to me!!
GM is a ” good enough ” company !!
The products are ” good enough ” !!
So the stock is ” good enough ” !!!
They say the sales are up, ok I will bite, sales to who, dealers or customers ? Just asking. I was led to believe a GM vehicle is sold when a dealer buys one to sell. If this is true, there are a lot of GM vehicles sitting around !!
GM simply has nothing to drive young investment !!!
I know the old guys here that love the dealers don’t understand it, but again look at Amazon !!
People said, see I told you the ugly truck interior would sell, look at the numbers this quarter !!
Well I say, you are saying again ” that’s good enough ” !!
I would say, just think if the interior was better how many they might be able to sell !!
Like I said, for me, when GM gets rid of the union, and the dealer, and has 3 EVs to offer. A Cruze sized EV sedan, Cruze sized EV truck, and a Cruze sized EV SUV, Ill buy some stock !!
Otherwise me feeding money to the top of GM and the top of the union, and the top of the dealership, and not to the product or the worker, that’s never going to happen !!
And when are all of you here going to see that when a large corporation treats the customer like $hit, and when you research it, like everyone under 40 does, it is a no go for the young investor !!!
Offer some, not all , attainable over the top products, and stand behind them, tell the truth !!
But its a catch 22, no money for better than ” good enough ” products to draw investor money, for better than ” good enough ” products !!
In my opinion.
Some good stuff here, but if EVs are the answer why would GM be down? The Bolt is the closest thing to a viable and affordable EV out there. I would agree with the “good enough” thoughts, but EVs are actually not yet reasonable for most buyers except those who would use them as commuter cars.
I do agree the Bolt is a great vIable EV. And probably the best out there for the price. However look at it. Viable for who? It needs some pizzazz. It’s a box on wheels. GM has some great designs out there bit this is not one of them.
If I am not mistaken, GM stock is considered as in the consumer cyclical sector. Forecast for recessions have been in financial news for some time and I have often heard of the next one could come as soon as 6 to 12 months. Now, whether we have a recession is another discussion; but the risk of recession is something that has to be considered. But if we look at the auto sector, what auto company has had exemplary stock market returns? I just looked at BMW. The 52 week high was $79.38 (eur); and on 10/4 it closed at $62.58 (eur) One year return on BMW, according to Bloomberg is -15.02%. Taking a look at Ford: 52 week high is $10.50; but on 10/4; F closed at $8.74.