Warren Buffett dumped his entire $850m stake in GM [[Bankruptcy 2.0?)

[313WX]

Warren Buffett dumped his entire $850m stake in GM

https://fortune.com/2023/11/15/warre...motors-amazon/

There's blood in the water. Why would he do this? This is why:

GM Stock Has Suffered During Mary Barra’s 9 Years as CEO

https://www.msn.com/en-us/money/tops...eo/ar-AA1iRLVX

"Barra became CEO of the company nearly a decade ago in January 2014 and since then, General Motors [[Ticker GM) stock has dropped 25%. The stock even has a slightly negative annualized return including reinvested dividends."

"GM stock trades for about four times projected 2023 earnings, one of the lowest price/earnings multiples in the S&P 500."

This is important because it will buy GM some time:

"Net cash at the automotive operations is about $13 billion, or about a third of its market value. GM also has a valuable financial subsidiary, and the stock trades for half of its book value."

General Motors owns 80% of Cruise, which is failing. The auto market is softening as consumers are in the red due to inflation and high interest rates. GM's after-tax earnings this year will be nearly $10 billion but it spent $10 billion on EVs, leaving nothing for shareholders. Misdirected and under threat of being abandoned by shareholders, I believe that once GM starts to burn through the $13 billion in cash, it will need to CUT it's way into profitability. Layoffs, plant closures, portfolio reductions and new product cuts are likely to be seen soon.