The Globe and Mail reports in its Thursday edition that while General Motors has boosted profit by
51 per cent since its November,
2010, its
stock has returned just 20 per
cent, trailing the 127-per-cent
gain for the Standard & Poor's
500 Index, David Einhorn, the president and co-founder
of Greenlight Capital,
wrote in slides posted to the
hedge fund's website. A Bloomberg dispatch to The Globe reports that Mr. Einhorn wants to split GM's
shares into two classes, with one
collecting on the company's dividend
and another capturing the
value from its earnings. The dividend
stock buyers would be entitled
to the $1.52 a share a year GM
pays out now (all figures U.S.).
Mr. Einhorn says, "GM's dividend is not respected
by the market." Creating a second class of
shares would "unlock GM's value
by forcing the market to appropriately
value the dividend and
give credit for GM's earnings
potential."
Mr. Einhorn says the two stocks together would
be worth between $43 and $60 a
share, boosting shareholder value
by as much as $38-billion. Mr. Einhorn's proposal
helped send GM's stock up 2.4
per cent, the biggest jump in six
weeks, to close at $35.56 on Tuesday
in New York trading.
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