Delphi files Bankruptcy

[Matt400]

I see Delphi filed for Bankruptcy yesterday. Now that their stock is in the toilet maybe its a good time to buy. . or not.

http://www.msnbc.msn.com/id/9618565/

 

[Greenleaf]

Doesn't the guy who writes for the TDR "First Ride" work for Delphi? They make brake parts AND fuel injection components right? (among othet products) I have some Delphi injectors for my truck.



Matt, it isn't you who writes for the TDR is it??



Scott

 

[Matt400]

Not me, I am self employed.

 

[rbattelle]

I see Delphi filed for Bankruptcy yesterday. Now that their stock is in the toilet maybe its a good time to buy. . or not.

http://www.msnbc.msn.com/id/9618565/

I had the same thought, but was told that buying stock in a bankrupt company is the worst idea in history. Apparently, the bankruptcy judge decides what to do with the stock... and he could decide to drop the price to $0. Ouch.



I'm not an accountant or stock broker, so I don't know how true that is.



-Ryan

 

[Matt400]

The thing that is enticing is that Delphi is so big they are not going away, I am sure it will be a reorganization. Of course its a gamble and its hard to imagine their stock will not be considerably higher than it is now in about 5 years.

Like the Martha Stewart thing. . woulda been good to buy stock when hers took a dive.

 

[rbattelle]

The thing that is enticing is that Delphi is so big they are not going away, I am sure it will be a reorganization.

Again, I had exactly the same thought.



I think Visteon might be a better bet. They didn't have to declare bankruptcy, but their stock price is still in the toilet. Just like Delphi, they're not going anywhere.



On the other hand, you'd think that if these really were such great bets then everyone and his brother would be buying up as much of it as possible.



Someone told me once never to buy stock in a company whose products you don't like, wouldn't own, don't trust, or don't know first-hand. I'm not sure how to apply that advice to a company like Delphi or Visteon.



Oh, and while we're on the topic... I think either Ford or GM are absolutely awesome stocks to be buying up right now. Think about it: both are in junk status and both are cheap (Ford's stock is under $15 per share!). You KNOW both companies are rock solid, even if they are losing money hand-over-fist lately.



I think up this stuff and then never take action. Other than mutual funds, I own no stock. I'm still kicking myself for not buying up some Cummins stock back in April/May when it was under $65.



-Ryan

 

[Matt400]

you'd think that if these really were such great bets then everyone and his brother would be buying up as much of it as possible.

True, but its that gut feeling of investing in a co. thats in trouble that keeps you from buying yet the whole idea is to buy when its low.

Someone told me once never to buy stock in a company whose products you don't like, wouldn't own, don't trust, or don't know first-hand. I'm not sure how to apply that advice to a company like Delphi or Visteon.

What many don't know is that Delphi builds parts for many big companies like GM and NAPA for example who simply packages the product with their own GM label.



I just bought a couple of electrical connectors from our GM source today that came in an ACDelco package but stamped on the part is Delphi.

Oh, and while we're on the topic... I think either Ford or GM are absolutely awesome stocks to be buying up right now. Think about it: both are in junk status and both are cheap (Ford's stock is under $15 per share!).

Good point, again its that gut feeling. . buy junk status!!

 

[RustyJC]

... ... . yet the whole idea is to buy when its low.

THAT'S what I've been doing wrong all these years!! :{ :{



Rusty

 

[AfterBurner]

Also, after bankruptcy the company can settle and have a bank buy them out for a % on the dollar. Could turn out good or bad, just depends on how they want to deal with the shares.



Jsut be careful! and buy more CMI!

 

[rbattelle]

What many don't know is that Delphi builds parts for many big companies like GM and NAPA for example who simply packages the product with their own GM label.

They're the number 2 global supplier (Bosch is #1, Magna is #3). That's one monster company, although I'm actually surprised that Bosch is #1.



-Ryan

 

[TboneMan]

Actually, this should be an eye opener for the big three. Whose next?



Car makers (assemblers) constantly beat up their suppliers. Any vendor (office suuplies, health insurance, parts... ) dealing with these people is pressured heavily to sell their product at the lowest possible price. In many cases, the product is sold below cost just to keep the business. The vendor then tries to make their profit from their other customers. If that doesn't work, you get situations like Delphi.





When you look at the percentage of a vehicles price (for the big three US assemblers) that goes to cover pensions, insurance and other benefits, you have to wonder how long can the any of these companies continue to make a vehicle of sufficient quality and keep them affordable for their customer base (joe/jane US resident).

 

[rbattelle]

Got an interesting perspective on Delphi this week. I was in a training class for the same CAD/CAM software that Delphi uses. Speaking with the instructor one day he said he was not at all surprised that Delphi went belly up. Seems they have the classic "we've always done it this way, so that's the only way we'll ever do it" mentality. They're using a very very old version of the CAD/CAM software and refuse to upgrade to the latest release.



That kind of attitude is a recipe for disaster.



-Ryan