This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

Obama Haters Shun GM: Reader Mailbag

Stocks in this article: GM

DETROIT TheStreet) -- We've heard from our readers, and some of them express their dislike for President Obama by avoiding GM (GM) products, both cars and shares.

"I avoid the stock because it is a dangerous investment that has been hyped by those with a vested interest," wrote Mark, a Philadelphia resident who asked that his last name not be used, in an e-mail. "I believe the balance sheet to be weaker than proclaimed to be and I don't trust GM." He avoids its vehicles as well.

"I would not vote for Obama based on his failing policies and divisive approach," Mark said. "The blatant favoritism towards the unions and the abuse of contract law when he screwed creditors of GM sealed his loss of my vote and many like me."

Jeff, another reader, said in an e-mail that he, too, eschews GM cars and stock. "In addition to boycotting GM, my family is doing the same thing for GE (GE) and Johnson & Johnson (JNJ)," he wrote. "Those companies supported Obama care and Cap & Trade and I will purposely try not to support any kind of economic activity which would lead to a perception of success for Barack Obama."

The e-mails were sent following the Sept. 2 publication of our story, "Do Obama Haters Also Hate GM?" We suggested that some investors may be put off by the close association between GM and the Obama administration and its labor supporters.

At the time, GM shares were trading around $23 a share, a price many analysts consider to be low. "The stock shouldn't be trading at $23," said Standard & Poor's analyst Efraim Levy, after reiterating a strong buy. In early afternoon trading on Friday, shares were down 95 cents to $21.53

In a posted comment, one reader noted that "maybe the reluctance to own GM has less to do with Obama and more to do with the way they stiffed their old shareholders and bondholders for billions under the bankruptcy laws." Indeed, the GM bankruptcy was an odd one, in which the government was both the principal creditor and the principal owner of the new, post-bankruptcy company.

Jeremy Anwyl, CEO of Edmunds.com, said Obama haters may shun GM stock, but most are less likely to shun GM cars. "People don't connect the corporate parent with the actual car brand unless they are the same, as with Chrysler" or perhaps GMC, which accounted for just 15% of GM sales through August, he said.

GM's principal product, Chevrolet, accounted for 71% of GM sales. Anwyl said many people don't realize that Chevrolet is part of GM. Studies during the Chrysler and GM bankruptcies prove the point, he said; Chrysler consideration and sales increased because "people thought ' In bankruptcy, there has to be a super deal on those cars.'" But "at GM, you didn't see much of a ripple, because a lot of people didn't know" that GM and Chevrolet are related.

He said TheStreet readers who refuse to buy GM cars probably have more awareness of the connection than average consumers.

In any case, GM spokesman James Cain said the automaker is not being hurt by negative perceptions. "People who value our new products are more than offsetting any people who avoid GM vehicles because of the government's investment and ownership stake," he said. "The proof is in the fact that we have gained U.S. market share in seven of the last eight months in 2011."

Additionally, Cain said, "negative sentiment about the company has declined steadily" since the bankruptcy and IPO. As far as avoidance by Obama opponents, "we don't see a correlation between the president's popularity and GM's," he said.

On the stock-buying side, the connection may be greater, Anwyl said. "GM stock is not Google (GOOG) stock," he said. "It's not a hot stock, so if people want to make a protest by not buying, it's easy to do."

-- Written by Ted Reed in Charlotte, N.C.

>To contact the writer of this article, click here: Ted Reed

>To follow the writer on Twitter, go to http://twitter.com/tedreednc.

>To submit a news tip, send an email to: tips@thestreet.com.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,810.06 +91.06 0.51%
S&P 500 2,063.50 +10.75 0.52%
NASDAQ 4,712.97 +11.1030 0.24%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs