This automobile bailout, er, loan has me thinking that I am not thinking big enough. The CEO’s of the Big Three auto companies think big and I am jealous.
The combined market cap of GM, Chrysler and Ford is about $7 billion. Quick review: market cap is the value of the business, or the number of shares times the share price. If I had $7 billion, I could buy all three by writing a check to my broker. ( I KNOW, it is not quite that easy, but even with some kind of premium, commissions and so forth, let’s say it is $10 billion.)
So, they are asking Washington to loan them–not buy– $25 billion. With a B. Which is more than three times what it would take to buy all of them outright. Instead of a loan, why don’t we just buy all three auto companies and then buy HOT WHEELS, too (Hot Wheels is Mattel, market cap $4 billion)?
hat tip: Harley
4 users commented in " Thinking Big "
Well, you may not have the 7 Billion to buy all three, but I think if we get all the readers to pitch in, we could do it easy! Besides, you are the guy to own all this stuff, because changing the name GM to GL only takes a change of one letter and to a neighboring letter at that. That’s the type of efficiency this country needs!
When I’m not making lame comments like the one above, I’m listening to people say things that actually are clever. Someone told Dave Ross (radio commentator) today that the solution was to have the oil companies bail out the car companies. They could do it with their profits and…that’s where they made the money in the first place!
I’m glad you pointed out the worth of the car companies compared with what they are asking for a loan. Something definitely is wrong with this picture and whatever happens, they need to change their way of doing business.
Very smart GL! Check out this fun story on CNN:
Big Three auto CEOs flew private jets to ask for taxpayer money
http://www.cnn.com/2008/US/11/19/autos.ceo.jets/index.html
– Eric
Conrad…none of your comments are ‘lame.’ And good idea on the oil companies paying their way too.
Eric—you are right. Entire PR departments back home in Detroit should be in trouble….it’s like wondering if the rock star visiting Darfur should put on a concert but with tickets discounted down to $50. They should know better.
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