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GM Stock: What’s Fueling the Decline?

Matt MonacoAvatar
Written by Matt Monaco
Reviewed by Jack Kellogg Fact-checked by Tim Sykes

General Motors Company’s stock is experiencing downward pressure after issuing a disappointing quarterly sales report and facing intensified competition in the electric vehicle market. On Tuesday, General Motors Company’s stocks have been trading down by -5.98 percent.

General Motors’ Latest Challenges

  • Facing allegations, General Motors could face higher scrutiny as it’s transgressed FTC rules on collecting and selling drivers’ geolocation data. This ordeal mandates a five-year ban on data sharing.
  • GM faces another legal challenge as the EEOC has accused them of age discrimination within collective bargaining frameworks, potentially impacting their labor relations.
  • A fresh recall affects 2,890 Chevrolet Equinox vehicles due to faulty adaptive cruise controls, reflecting ongoing quality and safety concerns.
  • Potential engine failure reports prompt the NHTSA to investigate GM’s L87 V8 engine, involving 877,710 vehicles, which may hurt their reputation.
  • In Australia, GM’s facing a class action over alleged transmission defects in certain Holden models, further adding to consumer distrust.

Candlestick Chart

Live Update At 09:17:52 EST: On Tuesday, January 28, 2025 General Motors Company stock [NYSE: GM] is trending down by -5.98%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

Recent Financial Performance of General Motors

As millionaire penny stock trader and teacher Tim Sykes says, “The goal is not to win every trade but to protect your capital and keep moving forward.” In the fast-paced world of trading, those words hold significant wisdom. Traders often find themselves caught up in the thrill of trying to win every trade, chasing after every market movement. However, the reality is that successful trading is not about winning every time but rather about maintaining a steady approach and safeguarding your capital. By focusing on risk management and keeping a long-term perspective, traders can navigate the market more effectively and sustain their trading success over time.

The recent figures from GM’s charts show an intriguing picture. On Jan 27, 2025, GM peaked at $55.06 before settling at $54.92. This slight climb, despite prevailing setbacks, shows the market’s nuanced response.

Zooming into their income statement, GM’s gross margin stands at 35.2%, indicating a substantial cushion against operating expenses. Still, challenges abound, as manifest in their pretax profit margin of 7.2%. Earnings from continuing operations were promising at $3.0 B in Q3 2024, showcasing resilience despite a troublesome landscape.

GM’s balance sheet notes total assets of $289.29 B, with liabilities totaling $215.12 B. A healthy current ratio of 1.2 suggests liquidity sufficiency to cover short-term debts. However, lean quick ratios at 0.5 point to potential cash flow hurdles without asset liquidation.

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Cash flow information holds paramount importance. GM sees operating cash flow pegged at $6.86 B, offering a beacon of hope amid litigation storms. Free cash flow rounds off at $4.6 B, underscoring efficient cash generation despite hefty capital investments.

Understanding the Factors Driving GM’s Stock

The current lawsuits against GM are not just legal mandates; they’re public relations bombs threatening market confidence. The EEOC’s age discrimination lawsuit questions not just corporate ethics but shakes future labor negotiations. Legal constraints on data further question GM’s adaptability to modern privacy concerns.

The recall of the Equinox signals more than just a batch of faulty vehicles—it’s a question of engineering and systemic oversight that strikes at the brand’s core promise of reliability. In a market increasingly dependent on technology, ensuring that software-backed systems function seamlessly isn’t just vital, it’s existential. Moreover, engine defect investigations could tarnish GM’s legacy as a dependable, innovative automaker if unaddressed.

GM’s financial pulse, although displaying strength through margins and asset turnover, faces headwinds. The blend of pending investigations and geographical class actions fosters an uncertainty cloud, casting shadows on investor sentiment. These factors may indeed keep GM from reaching its full financial potential.

Conclusion and Market Outlook

GM faces an uphill path with myriad challenges. The current landscape for GM showcases a medley of legal trials and product recalls, demanding a strategic pivot to uphold trust and maintain market relevance. Their robust asset-base provides a buffer, but the way forward hinges on keen risk management and redemptive measures. As millionaire penny stock trader and teacher Tim Sykes says, “Cut losses quickly, let profits ride, and don’t overtrade.” This principle might well apply to GM’s strategic approach, emphasizing the importance of agile adjustments and leveraging strengths while addressing weaknesses.

Future momentum is tied to resolving core issues, reestablishing trust, and transparently communicating these changes to the stakeholders. Until clarity emerges, market volatility might persist, dictating cautious and calculated trader strategies.

This is stock news, not investment advice. Timothy Sykes News delivers real-time stock market news focused on key catalysts driving short-term price movements. Our content is tailored for active traders and investors seeking to capitalize on rapid price fluctuations, particularly in volatile sectors like penny stocks. Readers come to us for detailed coverage on earnings reports, mergers, FDA approvals, new contracts, and unusual trading volumes that can trigger significant short-term price action. Some users utilize our news to explain sudden stock movements, while others rely on it for diligent research into potential investment opportunities.

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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”