{"id":27287,"date":"2024-06-16T23:56:00","date_gmt":"2024-06-16T15:56:00","guid":{"rendered":"https:\/\/www.granitefirm.com\/blog\/us\/?p=27287"},"modified":"2025-05-31T18:32:43","modified_gmt":"2025-05-31T10:32:43","slug":"gm-capital-operations","status":"publish","type":"post","link":"https:\/\/www.granitefirm.com\/blog\/us\/2024\/06\/16\/gm-capital-operations\/","title":{"rendered":"Capital operations are the root cause  General Motors\u2019 30% rise so far this year"},"content":{"rendered":"\n<p>I read <a href=\"https:\/\/www.barrons.com\/articles\/gm-stock-buybacks-capital-returns-fa2ece7f\" target=\"_blank\" rel=\"noreferrer noopener\">a good article in Barron\u2019s<\/a> today and can\u2019t wait to share it with investors.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #ffffff;color:#ffffff\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #ffffff;color:#ffffff\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/06\/16\/gm-capital-operations\/#What_is_capital_operation\" >What is capital operation?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/06\/16\/gm-capital-operations\/#Finally_a_good_example_for_capital_operation\" >Finally a good example for capital operation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/06\/16\/gm-capital-operations\/#GM_share_price_is_a_standout\" >GM\u2019 share price is a standout<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/06\/16\/gm-capital-operations\/#Improving_fundamentals\" >Improving fundamentals<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/06\/16\/gm-capital-operations\/#Repurchase_is_the_root_cause\" >Repurchase is the root cause<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/06\/16\/gm-capital-operations\/#Related_articles\" >Related articles<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_capital_operation\"><\/span>What is capital operation?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In Sections 6-7 of my book &#8220;<a href=\"https:\/\/www.books.com.tw\/products\/0010935641\" target=\"_blank\" rel=\"noreferrer noopener\">The Rules of 10 Baggers<\/a>&#8220;, &#8220;Five Capital Operations  Have a Strong Impact on Stock Prices&#8221;, the entire section is dedicated to introducing the capital operations of enterprises.<\/p>\n\n\n\n<p>The content will not be repeated here. Interested investors can refer to the contents of my book. And I also specifically emphasize that capital operations are very important for all listed companies.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Finally_a_good_example_for_capital_operation\"><\/span>Finally a good example for capital operation<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"GM_share_price_is_a_standout\"><\/span>GM\u2019 share price is a standout<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The stock prices of peers in the industry will be terrible in 2024, with only General Motors standing out. As of the close of trading on December 17, GM&#8217;s stock price had risen 45% since 2024, about 17 percentage points higher than the S&amp;P 500. It is the only stock among the major US automakers or auto parts suppliers that is still rising in 2024, except Tesla.<\/p>\n\n\n\n<p>By comparison, shares of Ford Motor fell 4%. Suppliers Aptiv and Magna International fell 20% and 29%, respectively. Excluding GM, the average decline among large U.S. auto stocks was 23%.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Improving_fundamentals\"><\/span>Improving fundamentals<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>While Tesla&#8217;s electric vehicle sales are poor and its stock price has fallen 40% this year, and the world&#8217;s auto industry is being hammered by China&#8217;s auto industry, GM&#8217;s profits are improving. <\/p>\n\n\n\n<p>Wall Street estimates operating profit of $13.5 billion in 2024, compared with $12.4 billion in 2023. Higher profits have boosted investor sentiment and expectations are rising. A few months ago, Wall Street forecast 2024 operating profit of $12.1 billion.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Repurchase_is_the_root_cause\"><\/span>Repurchase is the root cause<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Share buybacks reduce the number of outstanding shares and increase the value of the shares, which usually results in higher earnings per share.<\/p>\n\n\n\n<p>In November 2023, GM announced a $10 billion stock repurchase plan. In June 2024, the company will invest an additional US$6 billion. <strong><em>The total stock repurchase amount of US$16 billion accounts for approximately 50% of the company&#8217;s total market value when GM announces this plan in November 2023.<\/em><\/strong> Please reread that last sentence a few times!<\/p>\n\n\n\n<p>Stock repurchase is the most typical and most effective method of capital operation.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"154\" height=\"100\" src=\"https:\/\/www.granitefirm.com\/blog\/us\/wp-content\/uploads\/sites\/2\/2024\/06\/gm-Custom.jpg\" alt=\"Capital operation\" class=\"wp-image-27288\"\/><figcaption class=\"wp-element-caption\">credit:Ideogram<\/figcaption><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Related_articles\"><\/span>Related articles<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/06\/16\/gm-capital-operations\/\" target=\"_blank\" rel=\"noreferrer noopener\">Capital operations are the root cause General Motors\u2019 30% rise so far this year<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/01\/29\/corporate-culture\/\">Identify good companies with corporate culture, how to do in overheated market?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/12\/16\/capital-alchemy-repurchase\/\">Apple&#8217;s multiple LT compound capital alchemy is repurchase, 41.9% shares reduced in 12 years<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/12\/18\/apple-repurchase\/\">Apple repurchase, Nvidia capital operation, Tesla, AI bubble, Willow quantum chip, this blog turns off comments<\/a><\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/03\/22\/share-repurchase\/\" target=\"_blank\" rel=\"noreferrer noopener\">Share repurchase keep share price  underpinned<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/08\/01\/buffetts-view-on-share-repurchase\/\" target=\"_blank\" rel=\"noreferrer noopener\">Buffett&#8217;s view on share repurchase<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/04\/27\/buffett-portfolio\/\" target=\"_blank\" rel=\"noreferrer noopener\">The commonalities of Buffett portfolio \u2013 cheap, fixed income, repurchase<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/10\/15\/how-does-tesla-make-money\/\" target=\"_blank\" rel=\"noreferrer noopener\">How does Tesla make money?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/06\/09\/the-future-of-the-electric-vehicle-industry\/\" target=\"_blank\" rel=\"noreferrer noopener\">The bright future of the electric vehicle industry<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/07\/15\/tesla-lost-advantages\/\" target=\"_blank\" rel=\"noreferrer noopener\">Tesla has lost edge in China<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/07\/14\/the-future-electric-car-giant-volkswagen\/\" target=\"_blank\" rel=\"noreferrer noopener\">The future electric vehicle giant Volkswagen<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/06\/26\/screen-electric-vehicles\/\" target=\"_blank\" rel=\"noreferrer noopener\">How to screen potential qualifiers for electric vehicles?<\/a>&#8220;<\/li>\n<\/ul>\n\n\n\n<p><em><strong>Disclaimer<\/strong><\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><em>The content of this site is the author\u2019s personal opinions and is for reference only. I am not responsible for the correctness, opinions, and immediacy of the content and information of the article. Readers must make their own judgments.<\/em><\/li>\n\n\n\n<li><em>I shall not be liable for any damages or other legal liabilities for the direct or indirect losses caused by the readers&#8217; direct or indirect reliance on and reference to the information on this site, or all the responsibilities arising therefrom, as a result of any investment behavior.<\/em><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Stock repurchase is the most typical and most effective method of capital operation. The total stock repurchase amount of US$16 billion accounts for approximately 50% of the company&#8217;s total market value when GM announces this plan in November 2023.<\/p>\n","protected":false},"author":1,"featured_media":27288,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[164,1516,129],"tags":[1280,646,506,362,1279,100],"class_list":["post-27287","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-repurchase","category-auto","category-ev","tag-aptv","tag-byddy","tag-f","tag-gm","tag-mga","tag-tsla"],"_links":{"self":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/27287","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/comments?post=27287"}],"version-history":[{"count":15,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/27287\/revisions"}],"predecessor-version":[{"id":36751,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/27287\/revisions\/36751"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/media\/27288"}],"wp:attachment":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/media?parent=27287"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/categories?post=27287"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/tags?post=27287"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}