dump

dump

Garneral Motors (GM) shares hit their lowest level since the Great Depression Tuesday a day after GM's top executives dumped their shares as the automaker heads toward a bankruptcy or a restructuring that would all but wipe out existing shareholders.

GM shares dropped 29 cents, or 20%, to close at $1.15 after falling as low as $1.09 earlier — a price not seen since 1933 in the midst of the Great Depression.

GM is headed for either a bankruptcy filing by a government-imposed deadline of June 1, or an out-of-court restructuring that would wipe out current stockholders by flooding the market with new shares to pay off creditors.

The automaker's stock could be worthless in a bankruptcy or worth less than 2 cents a share if it proceeds with plans to issue shares to creditors led by the U.S. Treasury Department, the company has said.

"It's a lose-lose situation as far as we see it," Standard & Poor's equity analyst Efraim Levy said.

"Given that there is a two-week deadline coming there should be additional downside pressure," Levy said.

"At this point the differentiation is that you are rooting for a recovery on GM the company where there is hope, but as far as the GM shareholders, there is no real positive outlook."

Last week, GM detailed plans to all but wipe out the holdings of remaining shareholders by issuing up to 60 billion new shares in a bid to pay off debt to the U.S. government, bondholders and the United Auto Workers union.

The debt-for-equity exchange would make the U.S. government, which has provided $15.4 billion of loans to keep GM afloat since the start of the year, the majority shareholder of a restructured automaker.

The plan would also leave GM stockholders with 1% of the equity.

The automaker, historically was one of the powerhouses in the Dow, the most widely known measurement of U.S. stocks. It has been on the index since 1925 and has stayed despite the dramatic fall in its stock price.

GM's market capitalization as of Tuesday was about $690 million, making it the smallest component in the Dow Jones industrial average by market cap. By contrast, Chevron has a market capitalization of about $136 billion.

GM has lost $88 billion since its turnaround efforts began in 2005 under former Chief Executive Rick Wagoner.