There is a fine line in stock markets between a price that signals a share is cheap and one that signals the company has problems.
Shares in this motor manufacturer crossed that line a long time ago. The business is valued at around one week’s turnover, so it is obvious what investors really think: This business is worth less than nothing.
The balance sheet shows shareholders’ funds of minus $35.5bn. The pension fund is in deficit. The company has massive turnover but has made operating losses in each of the last three years with more losses expected this year and next.
The company has a reputation for making gas-guzzling cars like the infamous Hummer, a part of the business, which is now up for sale. The whole corporation is a bit like an old Range Rover, more of a liability than an asset, because the running costs are so high.
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