Just a few months ago the US automaker was seen as a very good asset by analysts and investors flocked to buy stock after the federal government finally sold the remaining shares.
But now, tadalafil following a huge public relations scandal in regards to a recall for 2.6 million cars equipped with a defective ignition switch, hospital General Motors has started a huge amount of unrelated recalls – aiming to address any other potential safety issue.
As the costs related to the recall amount, stomach during the year’s first quarter Warren Buffett’s Berkshire Hathaway Inc. decided to drastically lower the stock it owns in the carmaker, while other hedge funds – like Greenlight Capital Inc. – decided to exit from the automaker completely.
“While a number of factors have pushed GM stock downward recently, the controversy around the ignition switch recall appears to have had a chilling effect, and has underscored the idea that despite attractive valuation, GM might perpetually be a value trap,” said Brian Johnson, a Chicago-based analyst at Barclays Plc who rates GM the equivalent of a buy.
Berkshire decided to cut down its GM stock by 25%, reaching at the end of the first quarter 30 million shares, while Greenlight, run by David Einhorn, sold around 17 million shares – with a worth of around $697 million.