GM Stock Value Up 33 Percent During Week Of April 6 – April 10, 2020

The value of GM stock grew during the April 6^th, 2020 to April 10^th, 2020 timeframe. Shares closed the week at $24.06 per share, which represents an increase of $6.02 per share, or over 33 percent, compared to last week’s closing value of $18.04.

Movements in GM stock value for the week were as follows:

• Monday, April 6^th: General Motors stock opened at $19.10 and closed at $19.55
• Tuesday, April 7^th: GM stock opened at $21.27 and closed at $21.30
• Wednesday, April 8^th: GM stock opened at $21.74 and closed at $23.13
• Thursday, April 9^th: GM stock closes the day and the week at $24.16 and closed at $24.06
• Friday, April 10^th:  stock market closed in recognition of Good Friday holiday

The rebound in GM stock value may be surprising to some, and not so surprising to others. Generally speaking, there are currently two camps of thought when it comes to investing in GM.

On the one hand, some still think that, due to the complications caused by the ongoing COVID-19 outbreak, things will get worse before they get better. In a recent report by Barron’s, Deutsche Bank Analyst Emmanuel Rosner said GM has about “15 [to] 17 weeks of liquidity under shutdown conditions before hitting its minimum cash levels.” As such, the analyst remains cautious despite rising share values.

On the other hand, reports also indicate that the overwhelming majority of analysts still rate GM stock as a “buy”, which is a good sign for prospective investors. Another good indicator is the fact that the possibility of a downgraded credit rating did not seem to have an adverse effect on share values, as GM stock rose following the news.

Interestingly, GM share values were experiencing this continued ebb and flow since mid-2018, long before Coronavirus complications, though shares have never dipped to the levels seen in March and April.

The impact of the COVID-19 pandemic is not to be understated, as the Big Three domestic auto manufacturers – Ford, FCA, and GM – have ceased production amid the outbreak. That said, there is a notable difference in other key decisions made by the companies. Case in point, Ford opted to borrow $15.4 billion from its existing credit lines and suspend its dividend, while GM drew down $16 billion, while keeping its divided.

For context, below is a timeline illustrating all the ways that the coronavirus pandemic has influenced GM operations and other facets of the auto industry:

• January 27^th: GM Imposes Employee Travel Restrictions
• February 7^th: General Motors Chinese Venture Making Masks
• February 11^th: Buick Encore GX, Chevrolet Trailblazer Production Halted In South Korea
• February 14^th: Concern Grows Over GM’s Truck Business
• February 15^th: GM China Resumes Production
• February 28^th:
  • GM Delays Production Restart At Wuhan Assembly Plant
  • Global Auto Sales Forecast Downgraded
• March 6^th: SAIC-GM Sales Plunge 92 Percent
• March 9^th:
  • Cadillac Lyriq Debut Postponed By Coronavirus
  • U.S. Auto Show Rescheduled
• March 12^th: Projections Show 9 Percent Dip In U.S. Auto Sales
• March 13^th: GM Asks Employees To Work From Home
• March 16^th:
  • General Motors, Ford And FCA Band Together For Coronavirus Task Force
  • NASCAR, IndyCar, Motorsports Interrupted By coronavirus
• March 17^th:
  • GM Pushes On With Detroit-Hamtramck Plant Retooling
  • GM Offers Assistance To Current Owners
  • GM Offers 0 Percent Financing, Deferred Payments
• March 18^th:
  • General Motors, Ford And FCA To Curtail Production Output
  • GM Employee In Michigan Tests Positive For Coronavirus
  • GM Suspends Production
• March 19^th:
  • GM Considers Producing Ventilators, Medical Supplies
  • GM Announces Intent To Halt Production In Brazil
• March 20^th:
  • GM Canada Suspends Production
• March 22^nd: Corvette Dealer Training Event In Spring Mountain Canceled
• March 23^rd:
  • GM Dealers Beginning To Offer Great Deals For Relief
  • General Motors To Host Dealer Webinars
• March 25^th: Industry Analysts Predict March Auto Sales Will Fall 40 Percent
• March 26^th:
  • Indy 500 Postponed Until August
  • GM Employees Hit With Salary Reduction
  • General Motors Ventilators Will Not Arrive In Time New York Governor Says
• March 27^th:
  • General Motors Deal To Produce Ventilators Stalls Out
  • GM And Ventec Move Ahead On Ventilator Deal, GM To Make Masks Too
  • Trump Orders GM To Produce Ventilators At Now Sold Lordstown Assembly
  • General Motors Asking Texas Plant Works To Voluntarily Return March 30
• March 30^th:
  • General Motors Doing A “Fantastic Job” Making Ventilators, Says Trump
• March 31^st:
  • Canadian Auto Dealers Get Federal Financial Aid
  • General Motors Delivering 20,000 Face Masks To Healthcare Workers Amid COVID-19 Pandemic
  • General Motors To Delay Redesigned And Refreshed 2021 Models
• April 1^st:
  • Everything GM Is Doing To Help During the COVID-19 Crisis
  • Future Variant Of The C8 Corvette Delayed?
  • GM Offers Free In-Vehicle Data During Crisis
• April 2^nd:
  • 2021 Chevy Colorado, GMC Canyon Not Delayed By Pandemic
  • Cadillac CT4-V Blackwing and CT5-V Blackwing Launch Delayed by Pandemic
  • Chevrolet Releases New Real People Stay Home Advertisement
  • GM Outlines Efforts To Build Ventilators 
• April 6^th:
  • GM Offers Month To Month Lease Extensions
• April 7
  • GM Foresees Credit Rating Downgrade
• April 9^th:
  • GM Assists Non-Profits
  • National Corvette Museum Hosts Online Car Show
  • GM Doubles Face Mask Production
• April 10^th:
  • Four GM Burtons Parts Facility Workers Test Positive For Coronavirus

There is some good news, though. A recent analysis shows that GM’s full-size SUVs outsold all rivals combined in 2019. Additionally, new products are on the horizon, including the recently-announced GMC Hummer EV pickup and SUV, GM’s advanced new proprietary Ultium batteries, which debuted at GM EV Day in early March, and a new modular BEV3 platform, which will underpin various upcoming electric models, such as the Cadillac Lyriq electric crossover, Cadillac Celestiq electric sedan, another Cadillac EV crossover and various EVs from the Buick and Chevrolet brands. However, the Coronavirus breakout has led to delays for most of these products.

Mary Barra at the GM EV Day presentation on March 4th.

By comparison, shares of GM’s cross-town rival, the Ford Motor Company, increased $1.13 per share, or 27 percent, this week.

For the most part, GM stock was in limbo throughout most of 2019, and has only faced more adversity in 2020. GM stock saw an initial jump in value as a result of overwhelmingly positive Q2 2019 earnings, wherein the automaker outperformed expectations. Prior to onslaught of the COVID-19 pandemic, several subsequent drops in value prior to the strike are believed to have been related to warning signs of an economic slowdown, along with various escalations with trade wars in China.

Over the last few years, GM has taken many steps to increase the value of its stock, including exiting markets where it can’t find ways to turn a profit (such as Europe, South Africa and India), closing plants in various parts of the world, divesting loss-making divisions (such as Opel-Vauxhall), making adjustments to its business model in order to prioritize profitability over chasing market-share goals, focusing on its Cadillac luxury brand to increase its share of high-profit automobiles, investing heavily into new-age mobility ventures such as electric vehicles and autonomous driving tech, while discontinuing some sedans (Cruze, Impala, LaCrosse, XTS, CT6) and closing various plants to focus on more profitable crossovers, SUVs and pickup trucks, such as the all-new 2021 Cadillac Escalade that was unveiled on February 4^th.

The 2021 Cadillac Escalade was unveiled on Febuary 4th.

Seeking to further streamline its activities in unprofitable markets, General Motors also announced its intention to phase out the Holden brand in Australia and New Zealand, in addition to pulling the Chevrolet brand out of Thailand and selling its Rayong assembly plant to Great Wall Motors.

Despite these actions, the value of GM stock has struggled to surpass the $40 mark, spending most of its time stuck in the $33-$38 per share range. The chain of events is problematic given that the “new GM” had its Initial Public Offering (IPO) at $33 per share in November 2010, causing frustration upon many investors.

The Cruise Origin autonomous ride-sharing vehicle was unveiled in January 21st.

We remain interested in seeing how GM stock performs through the summer of 2020, especially during the COVID-19 crisis. The refresh of a bunch of 2021 models will be delayed, such as the Chevrolet Silverado 1500, GMC Sierra 1500, Cadillac XT4, Chevrolet Traverse, Chevrolet Equinox, GMC Terrain, Chevrolet Bolt EV and Chevrolet Camaro.

Meanwhile, the Detroit-based automaker is continuing the launch of its GEM-based vehicles for developing markets and begins to launch its all-new full-size SUVs and various new Cadillac models this year. In addition, the roll-out of its full-size pickup trucks is now complete, which means the company will benefit from an entire calendar year with a full lineup. All of these products are expected to contribute significantly to GM’s bottom line.

The automaker is also planning to roll out the Cruise Origin, its autonomous ride-sharing vehicle in 2022, which will be built at the GM Detroit-Hamtramck plant in Michigan. GM sees the robo-taxi service as a significant opportunity for growth.

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