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Thursday, October 23, 2014
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Published: Thursday, 2/26/2009

Firms' stocks plunge below asking price of their goods

ASSOCIATED PRESS

What costs more - a spark plug or a share of General Motors Corp.? A Sunday New York Times or a share of the newspaper company? A General Electric Co. toaster or a share of GE?

In the surest sign of the depth of the recession, the products associated with these high-profile companies now cost more than buying a piece of the business.

Shares of some of the most renowned companies have come under assault as the worst recession in decades saps investor confidence and drags major stock indexes to their lowest levels since 1997.

Despite Tuesday's 3 percent gain, the Dow Jones industrial average is still off almost 50 percent from its 2007 high - and there's little evidence it's hit bottom.

The major indexes fell again yesterday.

"This is a time for the history books," said Jim Coons of Coons Advisors, a financial consultant.

When the housing bubble began to burst, share prices began to cascade first in the home-building industry, but it spread quickly to almost every sector of the economy.

Banks, stung by plummeting mortgage values, followed. A share of Citigroup Inc. which cost $55.66 at the beginning of 2007, now costs $2.52. ATM fees can total $3 or more for using an out-of-network bank card.

Since the start of 2007, shares in companies from every sector have been hit.

•GM shares have fallen from $30.30 to $2.55, less than the cost of a standard spark plug (about $3.79).

•New York Times Co. shares have fallen from $24.27 to $3.96, cheaper than the $4 cost of its Sunday edition.

•GE shares fell from $30.30 to $9.01, cheaper than a GE two-slice bagel toaster at Wal-Mart, selling Tuesday for clearance price of $12.

•Office Depot Inc. is down from $38.27 to $1.00, less than a 12-pack of medium point Papermate BallPoint Stick Pens that run $1.89.

•US Airways has fallen from $53.89 to $3.30, less than the current $4 cost of two in-flight coffees.

The bargain-basement stock prices of America's best-known companies present either the greatest opportunity of a lifetime - or the biggest money pit this side of the Great Depression.

Of course, many didn't survive then - and many won't survive now.



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