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This Day In Market History: General Motors Declares Bankruptcy

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This Day In Market History: General Motors Declares Bankruptcy
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Each day, Benzinga takes a look back at a notable market-related moment that occurred on this date.

What Happened?

On this day nine years ago, General Motors Company (NYSE: GM) filed for Chapter 11 bankruptcy.

Where The Market Was

The Dow closed at 8,721.44. The S&P 500 traded at around 942.87. Today, the Dow is trading at 24,415.84 and the S&P 500 is trading at 2,705.27.

What Else Was Going On In The World?

In 2009, the World Health Organization declared the H1N1 influenza strain, commonly referred to as “swine flu,” a global pandemic. Michael Jackson died at the age of 50. A U.S. postage stamp cost 42 cents.

GM Throws In The Towel

After years of struggling to stay afloat, the 2008 recession was the final nail in GM’s coffin. Out-of-control costs and pension liabilities had plagued the company for years, and it became clear that nothing short of a blank slate would fix the ailing auto giant. GM reported an astonishing $38.7 billion loss in 2008, and revenue had declined 45 percent.

After officially declaring bankruptcy on June 1, 2009, GM stock finished the day at 75 cents per share. Within roughly a week, GM was removed from the Dow Jones Industrial Average for the first time since 1925. At the time of its bankruptcy, GM’s $172 billion in liabilities made it the second largest U.S. industrial bankruptcy in history.

A restructured GM triumphantly returned to the market with a massive IPO in November of 2010, selling IPO shares for $33. Today, GM stock is trading above $42.

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