Each day, Benzinga takes a look back at a notable market-related moment that occurred on this date.
What Happened? On June 1, 2009, General Motors Company (NYSE:GM) filed for Chapter 11 bankruptcy.
Where The Market Was: The Dow closed at 8,721.44. The S&P 500 traded at around 942.87.
What Else Was Going On In The World? In 2009, the World Health Organization declared the H1N1 influenza strain, commonly referred to as “swine flu,” a global pandemic. Michael Jackson died at the age of 50. A U.S. postage stamp cost 42 cents.
GM Throws In The Towel: After years of struggling to stay afloat, the 2008 recession was the final nail in GM’s coffin.
Out-of-control costs and pension liabilities had plagued the company for years, and it became clear that nothing short of a blank slate would fix the ailing auto giant. GM reported an astonishing $38.7 billion loss in 2008, and revenue had declined 45%.
After officially declaring bankruptcy on June 1, 2009, GM stock finished the day at 75 cents per share. Within roughly a week, GM was removed from the Dow Jones Industrial Average for the first time since 1925. At the time of its bankruptcy, GM’s $172 billion in liabilities made it the second-largest U.S. industrial bankruptcy in history.
A restructured GM triumphantly returned to the market with a massive IPO in November of 2010, selling IPO shares for $33. Today, GM stock is trading above $38 with a market cap of around $56 billion.
