Do Obama Haters Also Hate GM?

DETROIT ( TheStreet) -- Perhaps the biggest surprise among the profusion of auto industry numbers that surfaced Thursday was this one: GM ( GM) shares fell 4%.

The oddity was that GM not only reported a strong 18% August sales increase, but also said it has gained market share since it emerged from bankruptcy in November.

The stock price decline was apparently prompted largely by a Bloomberg story that said the company faces a pension shortfall up to $35 billion, which could delay a dividend or stock buyback.

Still, GM stock is down 37% for the year. It is down 34% since opening at $35 in November, during an IPO that accompanied the company's emergence from bankruptcy.

On Thursday, the shares gave up $1 to close at $23.03. "The stock shouldn't be trading at $23," said Standard & Poor's analyst Efraim Levy, after reiterating a strong buy.

Ford ( F) shares are down 36% for the year; on Thursday, they closed down 27 cents at 10.85.

GM's decline comes despite an 18% year-to-date sales gain and second-quarter earnings of $2.5 billion, marking the sixth consecutive profitable quarter. The company has nearly $34 billion in cash.

The market share gains are significant, given that many expected a continuing share loss following a restructuring when GM went from eight brands to four.

In 2009, GM board member Stephen Girsky said the company hoped to maintain a market share slightly above 19% upon emergence. In August, the U.S. market share was close to 20% and the year-to-date market share was 19.6%, said Don Johnson, vice president for U.S. sales, on the company's sales call Thursday.

In an interview, Levy said a "meaningful proportion" of GM's market share gains -- he wouldn't specify further than that -- results from the decline in availability of Japanese cars following the March earthquake and tsunami.

"GM benefitted from the misfortune of Japanese competitors -- that was a factor," Levy said. "But they did some things right as well. They have some good products that came to market at the right time."

A variety of auto analysts believe that investors are ignoring the GM story.

So permit us to promote a theory.

As GM was emerging from bankruptcy, experts expressed concern that buyers would stay away from its products because they were put off by the specter of government assistance. To an extent, these concerns may have been heightened by the widespread love of the Ford story, in which consumers sought out Ford vehicles because the company saved itself and didn't require government help.

So perhaps today, some investors are put off by the close association between GM and the Obama administration and its labor supporters.

It is possible to say that saving GM was a signature accomplishment for the Obama administration.

But it is also possible to say that the administration saved a company that ought to have suffered through a real bankruptcy, not one in which the government maintained full control, and that this arrangement enabled the claims of the United Auto Workers to take precedence over claims of secured bondholders.

In our country today, the Obama administration has a large contingent of vehement detractors. Perhaps some of them are taking out their scorn on the shares of the company it rescued.

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

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