That’s the good news. The bad news is that GMAC just reported Q1 earnings (or lack there of) with losses of $675 million, compared with $589 million a year ago. (That’s more than $1 billion in two quarters) Geez.
They claim that they were able to loosen credit and extend more loans to GM customers and they will also start to service Chrysler loans this month. So they have more business, but if they still have to do more writedowns in everything they own (loans, real estate, and other assets), then they are just going to keep losing money.
I never get why the CEOs can just keep losing the company’s money and issue more debt to keep them afloat in bad times, and then pay themselves handsomely when times are good. It’s like someone who gambles and don’t have to take losses, while pocketing a percentage everytime the bet turns out to be right. Even I can make money that way.
So while GMAC may not go bankrupt, they are still in serious trouble. Just stay away.
Oh btw, GM just said they are going to do a reverse stock split of 100 to 1. So while it was like a $1 dollar stock, it’s now a $100 stock. Also, GM is negotiating with the government to covert all its debt into shares, and that the government will own at least 50% of the company. If you are a shareholder, oh well.