Dow Jones Newswires Report on Motors Liquidation Co. Sparks 33% Decline in Shares after Three Weeks of Gains

- Market-Moving News Clears Up Misperceptions About Company's Relationship to General Motors Co. -


NEW YORK, Aug. 28  /PRNewswire/ -- On August 12, 2009, Dow Jones Newswires reported on the rationale behind recent gains in the stock of Motors Liquidation Co. (Pink Sheets: MTLQQ), formerly General Motors. The stock, which had been trading below 30 cents as recently as late July, had risen another 6% early that day to $1.17, but the Dow Jones report highlighted just how irrational the recent gains were. Within 90 minutes of the release of the Dow Jones story, the shares fell to 75 cents and closed 33% lower at 73 cents.

Motors Liquidation, which is winding down former GM assets in bankruptcy court, had seen its share price triple over the previous three weeks largely due to optimism about news, including developments related to the government's Car Allowance Rebate System, also known as cash for clunkers, which would stand to benefit the new GM that emerged from bankruptcy in July. The article noted that the fate of the new GM, which isn't publicly traded, has no bearing on the outlook for Motors Liquidation, clearing up the misperception that MTLQQ referred to GM. In fact, as the article noted, FINRA, the Securities & Exchange Commission and online brokers had all warned investors about the risks associated with investing in Motors Liquidation. The company itself, on the front page of its Web site, said there will likely be no value for stockholders, "even under the most optimistic of scenarios."

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