The auto industry is under enormous pressure. Now a fight between a billionaire investor and General Motors has came to a head.
Billionaire Investor David Einhorn of Greenlight Capital called for a split in General Motors stock. He wanted to create two investment options, one that provided a steady dividend and another that offers returns on future growth. The idea was it would encourage more people to buy the stock, driving up the price.
“Nobody but him and a handful of other people are buying it, said John McElroy, Autoline Daily Host. “This just is a crazy idea.”
McElroy says there are legal problems the board could face with such a split. If a vote hurts one stock, but helps another, there could be issues. Still, the reason for the idea is obvious. Greenlight Capital owns 3.6 percent of General Motors.
“All the stocks of all the car companies stink, but GM’s stinks the most,” said McElroy.
GM asked stockholders to vote against it and about 91 percent of them did.
GM CEO Mary Barra said today the company will take action to address its stock prices by promoting its cost cuts and earnings. She said it is also making large investments in autonomous vehicles which will lead to a technological revolution in transportation.
“The investment community, and I am talking overall, just does not believe that this investment in mobility will pay off anytime soon. Yeah, it will pay off in a decade, but not right now,” said McElroy.
