Daily Auto News Automaker Stock Hammered in Market Tailspin
Posted by admin on Tuesday Sep 30, 2008 Under Daily Auto News
Daily Auto News
The New York Stock Exchange lost more than seven percent of its value in just a few hours of panic selling yesterday after the House of Representatives rejected a government plan to ease the credit crisis. In the market drop, few industries landed as hard as the automakers.
The Detroit News reports, “GM stock fell 12.8 percent to $8.51, losing $1.25 a share, to fall to its lowest close since June 1954, according to the University of Chicago’s Center for Research in Security Prices.” The drop takes General Motor’s total market capitalization down to $4.8 billion — down from a high of over $66 billion in 2000. Ford was also shaken, trading at $4.17 per share yesterday, “its lowest close since February 1986.” Ford’s capitalization stood at $9.43 billion when markets closed.
Foreign rivals of the Big Three also so their shares drop, but not in proportion to what GM and Ford suffered. Bloomberg reports, “Toyota Motor Corp., Japan’s largest automaker, fell 4.6 percent” yesterday. Honda shares fell 3.7 percent, while Nissan dropped by 4 percent.
Further market drops for the automakers may come soon, as all are expected to report dismal September sales figures on Wednesday. Toyota, Honda and Nissan have already announced production cuts, according to the Washington Post, after “Car shipments to the United States nosedived in August, down 30 percent.”
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