Frustrated GM investors ask what more CEO Barra can do

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GM shares fell 22 percent since CEO Mary Barra took over in January 2014.

DETROIT – General Motors CEO Mary Barra has led the No. 1 American car manufacturer in its nearly five-year lead, but that is still not enough to satisfy investors.

In anticipation of the third quarter results on 31 October, GM shares trade about 6 percent less than the price of $ 33 per share on which they were introduced in 2010 in a first public offering after the bankruptcy.

The car manufacturer's stock has dropped 22 percent since Barra took over in January 2014. After having reached a record high of $ 46.48 on October 24, 2017, the shares fell by 33 percent, bringing the annual dividend yield to 4.7 percent coming. In the same period, the Standard & Poor & # 39; s 500 index rose by 7.8 percent.

GM shares rose 0.4 percent on Friday to close at $ 31.20.

Several shareholders contacted by Reuters say that in less than four years, GM faces a third major action by shareholders of activists if the share price does not improve.

"I expected it," said John Levin, chairman of Levin Capital Strategies. "It just seems like a tempting bite for someone." The Levin company owns more than seven million GM shares.

Barra assisted the company in handling a federal criminal probe of a misrepresented security announcement, sold European operations that lost money, and returned $ 25 billion to shareholders through dividends and share buybacks from 2012 to 2017.

GM refused to comment on this story, but the business leaders privately expressed their frustration about the market's reluctance to see it as something more than a manufacturer that was mainly tied to the sales cycles of the car market.

GM's profitable North American truck and SUV business and Chinese money-making activities are estimated at just $ 14 billion, excluding the value of GM's stake in its $ 14.6 billion Cruise automated vehicle business and its cash reserves from its market capitalization of $ 44 billion.

The recent slump in the Chinese market, GM's largest and most demanding US demand, is raising pressure.

GM is one of the few global car manufacturers without a founding family or a government that can serve as a stronghold against corporate raiders.

In 2015, under the leadership of investor Harry Wilson, a group insisted on GM to launch a $ 5 billion share buyback and commit to what is now a $ 18 billion ceiling on the cash level that the company would hold . In 2017, GM relinquished a call from hedge fund manager David Einhorn to split its ordinary shares into two classes.

Einhorn, whose company owned more than 21 million shares by the end of June, refused to comment on GM's share price.

Other investors said that there were no clear alternatives to Barra's approach.

"I am clearly a frustrated investor," said Michael Razewski, a partner of Douglas C. Lane & Associates, who owned 2.57 million GM shares at the end of September. "GM is a name that I am still extremely optimistic about despite years of disappointment."

Some investors said they would welcome a spin-off or partial float of Cruise, or creating a tracking stock, as a way to highlight the potential value of GM's autonomous vehicle technology.

"In the short term, Cruise is the only way to drive this stock higher," Razewski said.

Some investors have given up the wait. Barometer Capital Management sold its 420,000 GM shares in the first quarter of 2017.

Barometer portfolio manager Jim Schetakis said GM should abandon the cash-spinning sedan business like rivals Ford Motor Co. and Fiat Chrysler Automobiles have done and possibly the activities in China have split off. Barra has had enough time as a CEO, he said.

"The board has to walk to the hill and remove the ball," he said.