GM: Worthless Stock

of General Motors have in common? Well, they're worthless.

Don't get caught up in the excitement of GM emerging from bankruptcy recently. The shares of the old GM literally have no claim on the assets or earnings of the newly reborn General Motors.

Consider these words from GM itself:

"GM management continues to remind investors of its strong belief that there will be no value for the common stockholders in the bankruptcy liquidation process, even under the most optimistic of scenarios. Stockholders of a company in Chapter 11 generally receive value only if all claims of the company's secured and unsecured creditors are fully satisfied. In this case, GM management strongly believes all such claims will not be fully satisfied …"

The shares of the old GM you might own have no relation whatsoever to the GM that just emerged from bankruptcy. They are completely separate corporate entities.

Sadly, it seems many folks don't understand this, as they're still buying shares. It's almost certain that someone buying these stubs today will end up losing their entire investment.

So sell your shares of the old GM, if you can. You're not hurting America, GM or anyone else by selling. The new GM will be leaner and far more stable than its predecessor, but its shares won't debut for quite some time.