GM Stock Halted as General Motors Issues Earnings Warning

  • General Motors (GM) stock was halted this morning due to a news development.
  • The company warned that its earnings will be less than expected due to supply-chain impacts.
  • Nevertheless, GM stock resumed trading as investors weighed a mix of good and not-so-good news.
GM stock - GM Stock Halted as General Motors Issues Earnings Warning

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In what was undoubtedly a shock to some investors, trading was halted on General Motors (NYSE:GM) stock briefly this morning. This was due to the company’s disclosure of inventory-related issues. However, GM stock is trading again, and it appears that General Motors has the situation under control.

Of all the stocks you might expect to have trading halted, this one probably wouldn’t be on top of the list. Yet, shares of General Motors were briefly un-tradable this morning. So, was this due to mysterious backdoor shenanigans on Wall Street?

Not at all. Today, General Motors issued its second-quarter 2022 results, accompanied by a Form 8-K. The quarterly press release certainly had its positive data points. For example, General Motors’ sales to commercial, government and rental fleets increased 29% year over year. Also, “Pent-up demand and improved availability helped drive large year-over-year increases” in deliveries of the Chevrolet Camaro, Colorado and Malibu, as well as selected Cadillac models.

So far, so good. What’s the problem, then?

GM Stock Is Halted, Then Resumed

Here’s where things get problematic. General Motors cited “ongoing semiconductor supply shortage and other supply chain disruptions mostly in June,” which isn’t much of a surprise. However, the company followed up with this shocker: “As a result, GM will hold about 95,000 vehicles manufactured without certain components in company inventory until they are completed.”

Evidently, this was startling enough to warrant a trading halt on GM stock. Yet, there’s more to the story. General Motors added that it will “recognize revenue when they are sold to dealers, which is expected to happen throughout the second half of 2022.” In other words, investors should stay calm and patient.

Furthermore, the impact of these events is “not expected to impact GM’s full-year earnings guidance,” according to the company. Perhaps the investing community is willing, then, to forgive General Motors’ inventory-related issues.

Actually, it didn’t take long for GM stock to resume trading this morning. As of 10:45 a.m. Eastern Time, the stock was almost flat and everything seemed to be up and running. Another day, another crisis averted in the ever-treacherous world of finance.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.


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