SOLAR TODAY Blog


>>The world turned upside down
November 20, 2008, 9:27 pm
Filed under: Investing, Transport

In a press release on Wednesday, the German photovoltaic manufacturer SolarWorld offered to buy the Opel division from General Motors for $1.25 billion. GM promptly scorned the offer.

Opel makes very efficient cars and trucks. The very existence of Opel technology legitimizes GM’s request for a share of the auto industry’s $25 billion federal loan to cover retooling costs to build smaller, fuel-sipping cars. GM wouldn’t be near bankruptcy today if it had begun two years ago to replicate the Opel tooling in Detroit. Opel is in fact the future of the company, so I can understand why they’d think $1.25 billion is too little.

On the other hand, GM’s stock sold for under $2.80 on Thursday. That’s a market cap of $1.9 billion. If SolarWorld is serious about the automobile business, it could buy a controlling share of GM stock for under $1 billion, put the American divisions into bankruptcy, liquidate most of it but keep enough of the infrastructure to make and sell Opels rebranded as Chevrolets.

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2 Comments so far
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I agree, but if they make it known they are going to buy up GM on the open market then the speculators and traders are going to rise the price and that controlling share may now cost them 2 billion. I guess the question they need to ask is how much they can make by divesting the rest of GM, and ramping up opel.

Comment by Anthony Johnson

Effective Dec. 9, 2008, the SOLAR TODAY blog has moved to http://solartoday.org/blog

Comment by Seth Masia




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