The wild ride on Wall Street continued this past week, as the stock market did volatility with a vengeance, especially Thursday’s sell-off. It is always a worthwhile venture to look at the “political stocks”, share prices of companies whose destiny seems particularly linked to the policy tropes of the Obama administration.
Two stocks grab one’s attention. And, if you are a dedicated Obot, the news is “unexpectedly” bad. GM plunged to a record low of 22,16, 33% off last year’s offering price of $33 (interesting symbolism, that). At these depressed levels, the federal government will probably defer plans to sell any more of its massive holdings of GM, having already absorbed a billion dollar loss on the disposition of its Chrysler stake.
And then there is AOL. The stock has been testing lows since its 2009 spinoff from Time Warner. Friday’s closing price of 12.24 marks a 44.5% negative return for the past 52 weeks. Earlier this year AOL tried to move away from its dialup legacy business and remake itself as a content provider. The signature move was this spring’s purchase of lefty blogging beehive Huffington Post. AOL paid over $300 million for the property, a substantial commitment of its free cash. Merger pangs and disappointing ad performance have soured investors on the company, which clearly has a way to go to implement its turnaround strategy.
Now one might hope that the Obama people would learn some lessons from these reverses, as they are big on hope. But since hope rarely triumphs over experience, that would be a most “unexpected” outcome!