Tuesday, October 11, 2005

GM Worth Only 1½ Years of Toyota Profits

After the collapse of Delphi, the stock price of General Motors tumbled more than 10%. Today it has recovered somewhat, but it is still way below last week's level. Because of GM:s long-term woes and its current losses, the stock is now valued at very low levels. It is nearly 40% lower than a year ago .

Interestingly, the total market value of GM is now less than $15 billion . Compare that with the annual profits of Toyota of $10 billion. This means that Toyota for less than two years earnings could buy GM. Given GM:s deep, deep problems that would perhaps not be a good idea for Toyota, but it illustrates just how low GM -Once America's greatest company- have fallen.

2 Comments:

Blogger Per-Olof Persson said...

Too much debt is not a good thing. Saving and investing must be the new model for companies, people and countries. Toyota has no debt and is ready to be the largest carmaker in the world.

8:39 PM  
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