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GM and its investors have been through a lot, of course, in the past few years. Now, for the first time since its reorganization, the company confronts a serious activist situation. And, what a situation it is.
Since its reorganization, GM has become a cash machine, and one of our top ten cash hoarders. As of 12/31/14, it has about $28 billion in cash and $9 billion in debt. As one investor put it recently, "Sitting around with $25 billion in your pocket getting zero percent on it just doesn't make any sense to me."
Now, investors want some of that cash back. Four major hedge funds, with about 2% of the shares, have hired a top banker-turned-activist to do just that. Whether Harry Wilson succeeds, and GM repurchases more shares, remains to be seen. GM's initial response promises to make it lively.
We read the agreements between Wilson and the funds, and explain in a current blog post.
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