Mon Nov 10, 1:12 pm ET
NEW YORK (AFP) – General Motors shares plunged more than 30 percent Monday after an analyst forecast their price would fall to zero, saying that even if there is a government bailout of the auto giant, shareholders would not benefit.
"We are lowering our target on GM equity to zero dollars," the Deutsche Bank report said.
"Even if GM succeeds in averting a bankruptcy, we believe that the company's future path is likely to be bankruptcy-like," it said.
"While we believe that GM's secured creditors may get a par recovery, unsecured creditors may get very low recovery. Equity shareholders are unlikely to get anything."
GM shares recovered slightly by mid-morning to 3.37 dollars after hitting a low of 3.02 dollars -- off 30.7 percent -- following the release of the Deutsche Bank report on the company.
The shares closed at 4.36 dollars Friday, down from more than 30 dollars a year ago.
On Friday the biggest US automaker reported steep quarterly losses and warned it would run out of cash in the first half of next year and appealed to the US government for help to save it from collapse.
The company announced a third-quarter loss of 2.5 billion dollars and said it had burned through another 6.9 billion of cash during the three-month period.
GM also said it had suspended takeover talks with struggling peer Chrysler and reported a deepening of its cost-cutting plan in the wake of steep financial losses.
The direct plea for government help came after GM and other automakers requested 25 billion dollars in government-backed loan guarantees during talks with Democratic House of Representatives Speaker Nancy Pelosi on Thursday in Washington.
Congress recently authorized 25 billion dollars in loan guarantees to help US automakers develop more fuel-efficient vehicles in order to meet upcoming regulations.
President-elect Barack Obama responded to the plea by saying in his first post-election news conference that he is placing "a high priority" on helping the auto industry during his preparations to assume office on January 20.
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