GM stock falls below IPO price as automakers struggle with supply chains

Yahoo Finance Live anchors discuss the impact of supply chain issues on the auto industry.

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BRAD SMITH: Let's talk about the auto industry for a hot second here, switching gears there. Shares of General Motors, we've been tracking those this morning in the pre-market and now as we've opened up. They're higher by about 0.8% after closing Monday below the post-bankrupt $33 IPO price for the first time since October of 2020. So the broad market sell-off here also impacting shares of Ford, of Tesla, Chrysler parent Stellantis as well. You're taking a look at this broader move higher in auto as right now we're seeing at least, gains in Ford up by about 1%, and really leading the autos at this point in time.

JULIE HYMAN: Yeah. So GM post-bankruptcy came back to the public markets on November 17th of 2010 at that $33 a share price. So it's-- it dipped below it in 2020, now dipped below it again yesterday. The shares coming into today were down 45% year to date. Now, rebounding a little smidge today. Ford is down 43% year to date, Tesla is down 39% year to date. This is all ex today's bounce. Stellantis down 31% year to date. So just-- I mean, so many things are down a lot here today but obviously, autos have really been struggling getting components, right?

BRAD SMITH: Right.

JULIE HYMAN: They are struggling even as their prices have been on the rise, their costs have been on the rise.

BRIAN SOZZI: And here's the next shoe to drop, we've been so focused on tech companies like Coinbase being pushed by their investors and analysts to start cutting back on expenses. We've not heard those discussions happen in a lot of other companies. And you had GM CEO Mary Barra yesterday at their shareholder meeting just reaffirm the billions of dollars they were going to be investing in electric vehicles. I understand they have to but I think the Street, a nervous Street would have liked to hear a little more just being rational about how much they do intend to spend in an environment where inflation, rates are going up. And that fits what you mentioned the BofA survey earlier on, that is-- that was one takeaway inside of that report where fund managers would like to see companies start to pull back a little bit on their CapEx just to show that they understand what environment they're operating in.

BRAD SMITH: Well, in the case of Ford, they've kind of positioned themselves for that, no? When earlier this year they had really put out the strategy that kind of split the business in two at least for right now in the terms of the reporting, the financial reporting of it, and being able to say this is our EV division, this is everything that we're going to be prioritizing as that next leg forward for Ford, and this is the ICE business, this is that internal combustion engine business. And if you're positioning a business in that capacity, it's perhaps in order to set up where you may need to make strategic reductions on one side of the business to support the continued investment on what you see as the new way forward for a company like Ford as well.

JULIE HYMAN: And by the way, a quick side note, just for fun I just looked up the year-to-date performance of components of the S&P 500 since I mentioned autos are down, so much is down, not even a fifth of the S&P 500 is higher year to date. And you won't need to guess as to know what the top performers are, in what sector they are, anybody?

BRIAN SOZZI: Oil?

JULIE HYMAN: Energy. Yes. Top 10 best performers are energy, Occidental being the best. It's more than doubled year to date. What a sharp contrast with what we're seeing from those automakers.