DETROIT— Whether it’s a matter of ignorance or greed, people are still buying General Motors stock, even though the company and the government have warned that the shares will someday be worthless.
Investors are picking up millions of shares every day, thinking they’ll profit from what is really a hodgepodge of outdated factories and a pile of debt left behind when the new General Motors Co. exited bankruptcy court protection.
Instead, they could end up losing money very quickly.
The price of the shares, currently under $1, has ratcheted up or down as much as 50 cents in one day.
On Thursday, investors traded 13.9 million shares, and the stock closed at 85 cents, down 4.1 percent. The old GM stock had a higher trading volume than big, viable companies like retailer CVS Caremark Corp., banker Capital One Financial Corp. and consumer products maker Procter & Gamble Co.
Industry analysts and regulators say two groups are buying Motors Liquidation stock: People who are confused and think they are getting shares of the new GM for cheap, and day traders or institutional investors hoping for short-term gains as others continue buying the stock.