GM: Turbocharged By Subprime Under The Hood
By Chris Ridder: General Motors (GM) reported earnings on Thursday, May 3, 2012 and so far the market has responded negatively. By the close of trading on May 4th GM is at $22.36, having fallen from just under $23 before the announcement. (Click charts to enlarge.)Now, I was going through GM's footnotes of its financial statements, and one gem I picked up was the changing composition regarding the credit quality of its financial receivables. Part of my original skepticism of the company was this quote from 2010:
GM's top North American executive Mark Reuss, under pressure to quickly sell more cars and boost GM's value as it gets ready to sell stock to the public, said a shortage of subprime lending is holding back sales in the U.S.
Now, one has available just over a year of data concerning GM's movement into subprime auto lending. This information is in the company's financialComplete Story »