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Derek Thompson

Derek Thompson - Derek Thompson is a senior editor at The Atlantic, where he oversees business coverage for the website.
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He is a visiting research fellow at the Committee for a Responsible Federal Budget at the New America Foundation. Derek has also written for Slate, BusinessWeek, and the Daily Beast. He has appeared as a guest on radio and television networks, including NPR, the BBC, CNBC, and MSNBC.

Why Are People Still Buying GM's Worthless Stock?

By Derek Thompson
Aug 24 2009, 12:46 PM ET Comment

Oh, the limits of Darwinism. Investors appear to be buying stocks of General Motors, even though the government and the company have announced that the stock will eventually be worthless. Barry Ritholtz is crying. Somewhere in the infinite, so is Gottfried Leibniz. But seriously, what the heck is going on here?



From the AP:

Investors are picking up millions of shares every day, thinking they'll profit from what is really a hodgepodge of outdated factories and a pile of debt left behind when the new General Motors Co. exited bankruptcy court protection. Instead, they could end up losing money very quickly. The price of the shares, currently under $1, has ratcheted up or down as much as 50 cents in one day.

It's unclear to me -- and to Ritholtz -- why GM's stock isn't already $0.00. Stockbrokers and funds might be playing tricky games on the margin, but I sincerely hope there aren't thousands of Americans out there scanning the market and thinking: Big car company stock for just pennies? Count me in! Atlantic Business doesn't do public service announcements, but here's one: Don't buy GM's worthless, worthless stock.

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