It is only deepening.............
TheMustangNews:
Ford Stock Hits Historic Low Part 3: $2.03
10-09-08: Ford the third bloody day in a row, Ford (F) stock has fallen to a historic low. Closing today at an all time low of $2.08, it had fluctuated even lower during the day at $2.03. We are nearing “penny stock” status in this week of market turbulence that is getting close to harming the auto industry in ways that we have seen banks destroyed in the past couple of months. We hate to say it, but it appears this trend is only deepening.
General Motors (GM) has also been on the hell-bound ride to ruin this week hitting s historic low of $4.76 per share, a 31% drop in value today alone. To give a scary comparison on where things are right now, Mattel Inc. is worth almost $2 billion more than GM. Motorcycle maker Harley-Davidson Inc., with a market capitalization of $6.83 billion, is worth more than Ford.
Wall street fears that automakers are the next domino to fall in the economic crisis. This is in part because dealerships cannot get buyers financed to sell the vehicles. Many buyers now have damaged credit due to the housing mess and foreclosures. Those buyers who still have marketable credit are finding that the bar has been raised drastically on loan approvals.
Anecdotal news we are hearing right now is that a year ago, dealers were getting 80-85% of all loan applications approved to sell cars. Today that number is hovering around 20-25% approval rate. This plunge in buyer approvals is directly connected to a plunge in sales. The bad news is that there is no end in sight.
If a majority of buyers are not credit worthy today, it will take months if not years for them to become approvable again in a best case. That fact has Wall Street looking at automakers in a new light. This problem is not going away and may unfortunately get worse before it gets better.