I'm getting email from all over the place about this. Thanks AFP.
This is how the story is appearing in The Age newspaper (Melbourne, Aust) but I know similar articles are doing the rounds all over the web at the moment (at Fox News, for example).
None of them actually cite a source for this. It's all based on rumour or reports by someone else (who conveniently remain un-cited).
The Age:
A consortium led by Formula One supremo Bernie Ecclestone is reportedly about to offer General Motors $1 for its struggling Swedish brand Saab.
Fox News:
Amid rumors that Swedish car maker Saab could be sold for a nominal $1, Swedish businessman Lars Carlstrom told Dow Jones Newswires Wednesday that his consortium will submit a revised offer for the company.
What's that revised offer going to be? $1.50?
Look, as far as I can tell, this has all been started by a quip by Bard Eker in Europe a week or so ago and it's gone viral from there.
Write a story about buying a car company for a dollar and people will click. Throw in the name of Bernie Ecclestone and people will click more.
The deal is in the vicinity of $400million, as quoted by Bloomberg earlier in the week. What remains to be sorted is how that price is paid and under what conditions.
That's where we're at right now.
If the deal is really a nominal charge ($1), then Saab comes with a serious amount of debt. If the true value of Saab is paid and the debt attached to Saab is paid by GM/ML, then the amount paid is the "full price". Usually these deals have some debt paid and some debt remaining.
Eggs, those financial reporters aren't just naive, they just really poor journalists!
Hopefully there will be some other financial figures to bolster the details so public perception isn't a "worthless" company.
http://sydsvenskan.se/ekonomi/article620274/Koenigsegg-En-krona-for-Saab.html
I posted it in comments last week.
OK, Swade so it's a joke.
Reminds me of this joke by our own Canadian stand-up, Russell Peters:
http://www.youtube.com/watch?v=Jg-fiNGkKsw
:-D
Consider the source, then disregard.
Fox"News" pssh.
Heck, I'll offer GM $20. It'll be an offer they can't refuse!!
Russell Peters is pretty funny.
Highly speculative, gets people clicking.
Does damage.
http://www.telegraph.co.uk/finance/newsbysector/transport/general-motors/6975278/Bernie-Ecclestone-could-buy-Saab-from-GM-for-1.html
That's what I'm talkin' about. Let's hope the full financial commitment of the deal is revealed (knock on wood) so Saab's value is not associated with this stupid dollar deal.
He said something like 'We are not asking for money to sell Saab. GM will not make money on this and it will cost us money to settle. But it will cost money to run the company! The loans we were offered by the Bank was, I imagine, in the region of 400 million U.S. dollars and it's around that level a new owner need to put up, it was what Koenigsegg had.' (translated to english from a swedish translation of what he said)
Then all this about $400 million isn't really the price for Saab, it's more of an insurance for GM. GM doesn't want to sell Saab to a company that can only keep Saab afloat for a few months or so and then go bust, which would mean that Saab once again would cause trouble and costs for GM. So GM want to make sure that the new company has the money needed to operate Saab, and this is what the $400 million is about.
The selling price is not important when other liabilities are also part of the contract.
Two examples of that are:
- VW bought SEAT (Spanish car company) for 1cent in the late 80's.
- Steve Jobs accepted being CEO of Apple for a years salary of 1$.
In both cases other costs/liabilities were also coupled to the contract.