General Motors Company (NYSE:GM) extended its correction for the third consecutive session on the back of the March sales report disappointment. The automaker company had reported a decline of 2.4% in sales on a y-o-y basis. Cadillac saw the sharpest drop at 6.8%, with the Chevrolet brand falling by 3.2%. On the other hand, the Chevrolet Silverado pickup truck saw an increase in sales by 7% and that of the GMC Sierra rose by 3.2%.
General Motors Company (NYSE:GM) has been taking some important steps in the recent weeks and certainly the launch of its all new 2016 Chevrolet Malibu, the midsize sedan, must be considered one of its most important ones. The Malibu before this one turned out to be a huge disappointment for the company and even a 2013 refresh couldn’t brighten its prospects. This all new Malibu is the model GM is seriously depending on to become its first bestseller in a long time.
General Motors Company (NYSE:GM) has recently settled a deal with activist investor Harry Wilson and 3 other hedge funds that own about 2% of the company, that it is going to buy back shares worth $5 billion in the coming two years. In return, Mr. Wilson will not be seeking a board seat and will wage any proxy battle. According to some analysts, the ideal level of cash for the company is about $20 billion but the company currently has around $25 billion in its balance sheet and that’s the reason the $5 billion outflow should not affect the company.
Technically, the current short term downtrend definitely looks like just a mild correction and strong buying may emerge from the strong support area in $35-$36. If the previous pattern of the corrections is repeated once more, then the $35 level can be retested before the long term uptrend reasserts itself.
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