OK, if you're a day trader and see MTLQQ.PK, don't buy it. The government and folks at General Motors Co. have warned investors not to buy old GM stock, but the price is jumping and falling by 50 cents and more on some days. Apparently, people think they are getting stock in the new GM, which emerged from bankruptcy in July.
An Associated Press report says the old -- worthless -- stock on Wednesday had a higher trading volume than big, viable companies like retailer CVS Caremark Corp. (NYSE:CVS), banker Capital One Financial Corp. (NYSE:COF) and consumer products maker Procter & Gamble Co.
(NYSE:PG). The report notes general thinking is that two types of people are buying the stock: people who are confused and think they are getting shares of the new GM for cheap, and day traders or institutional investors hoping for short-term gains as others continue buying the stock.
Of course, those looking to buy new GM stock may get a
chance in July. Reports quoting an 8k filing said the Detroit automaker intends to offer stock to the public by July 10, 2010, the one-year anniversary date of its exit from bankruptcy. -
Baz HiralalGo to the story
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If people are buying through brokers the brokers will have to answer for it.
The broker would have an obligation to not allow a client to buy a worthless stock.