Wall Street Continues To Punish GM And Ford Stocks Even After Record Profits

A tweet from Tesla Motors CEO Elon Musk is enough to send the upstart automaker’s stock surging, but when General Motors Co. and Ford Motor Co. post record profits, Wall Street punishes them.

The financial market’s response to the companies couldn’t be more stark. Analysts and industry experts say investors don’t believe traditional automakers have transformed their companies in an era of dramatic technological changes, and they’re concerned the money will stop flowing in the next inevitable downturn.

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dumpsty - 2/10/2016 10:47:09 AM

+2 Boost

I'm guessing that investers should have reasonable doubts concerning sustainable profits.

GM, Ford are taking advantage of the current consumer demand for trucks & SUV/CUVs. There is no real indication that if the market shifts to smaller vehicles (with much better fuel ratings), that these automakers can respond quickly & still earn the same level of profits they're earning today.

Can they survive a market where SUV/CUVs aren't the vehicle of choice for many consumers? What if they have to rely on their small & mid-size vehicles, will their profits continue or will they bleed cash just to keep production moving?