Current Events Assignment (Finance) – Article Example
Topic: Investment in an auto industry “Hayman Said to Invest in GM as Bass Bets on Detroit” Tim Higgins, Kelly Bit, & Stephanie RuhleSource: Bloomberg.com
Summary: Hayman Capital Management LP stakes to invest in the Detroit-based General Motors. As the United States chills out from its ownership role, General Motors should be leading the auto industry in 2014. Hayman Capital shows high confidence in General Motor’s equity that Bass considers as the most forceful risk/reward situations of any large cap in the world. The Hayman Capital Management decided to bet on GM positing that based on its conjectures, the world’s largest automaker should increase in value between a 12 and 18 months, and this increase is projected to be at 40%. General Motor’s stock gained a 34% increase this year, surpassing the 26% increase by the Standard & Poor’s 500 Index. Following the a sales drop in 2009, the company’s demand has recovered, which was followed by a federal judge decision that General Motors is eligible for bankruptcy protection from creditors to be paid $18 billion. Bass looks towards a positive outlook of GM in 2014 considering that back in 2012, GM was trading in $5.5 billion worth of shares, showing that the company’s shares in the automaker industry is steadily rising.
Relationship to class material: The contents of the article are in perfect coherence to a finance course. It presented the dynamics of financial investments, particularly in a large-scale production spectrum that involves multi-billion dollar companies. It describes the right staking strategies that are very important skills to learn if you plan to pursue a career in banking and finance and other related fields.
Additional Reference: “U.S. Stocks Drop a 5th Day as Data Fuel Stimulus Bets”
Discussion Prompt: What could the GM do in order to maintain or stabilize its demand and lead the equity front in 2014?