GM climbs as Buffett-owned company buys shares
Wednesday, May 16, 2012
General Motors Company climbed as much as 4.3 percent following news that Warren Buffett's Berkshire Hathaway purchased a stake in the automaker, according to Bloomberg.
GM's gain was its largest in nearly a month as the largest U.S. automaker welcomed the attention from the Buffett-led company, which held 10 million shares as of March 31, the news source stated.
“Seems like GM’s low valuation is just too good for Warren to resist,” Adam Jonas, an analyst with Morgan Stanley, wrote in a note to investors. “While buying 10 million shares of GM isn’t a huge bet (yet), the market signal for the U.S. auto industry is as unprecedented as it is fascinating.”
According to a separate report from Bloomberg, GM is also affected by Facebook's impending initial public offering. The news source stated that GM, the world's largest automaker, has voiced its intentions to no longer advertise on Facebook as the social media giant prepares for its IPO. The company has spent $1.78 billion on advertising in the United States during 2011 outside of Facebook.
Potential investors can plunge into the world of stock trading with the help of discount brokers.
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