GM - General Motors

[RadMan24]

There are a few posters against GM manement on here but appear to focus solely on stock price and swear by it. I offer some questions to think about after reading you alls posts:

 

Has GM has underperformed its peers in the last five years?

 

Second, if you don’t like management or think they are not telling the truth, why do you own the stock? If you have sold, then I have no further questions.

 

I’m readily confused people are so depressed th stock hasn’t moved but GM has the BEST operating margins in NA and makes the MOST money out of China compared to the domestic 3 (top 2 globally) So, if you still hold the stock, why are you NOT buying more?

 

Finally, given all the critiques on capital allocation, How do you think the $1 billion cruise investment is a bad move of capital  allocation when its now valued at $15b with Honda backing?

 

Peter Lynch never hurts:

“

If you know your cyclical, you have an advantage in figuring out the cycles. (For instance, everyone knows there are cycles in the auto industry. Eventually there are going to be three or four up years to follow three or four down years. There always are. Cars get older and they have to be replaced. People can put off replacing cars a year or two longer than expected, but sooner or later they are back in the dealerships. The worse the slump in the auto industry, the better the recovery.

“

 

Side note. By GM not buying back stock, it gives it cash reserve to go after AM General

[Spekulatius]

So, what’s  GM’s FCF? I get $13.9B cash flow - $8.4B = $5.5B FCF. That is with the current $48B market cap a  11.5% FCF yield. I think there are car suppliers that are actually trading at an even higher FCF yield (LEA being one example, I think they trade at a 12% + FCF yield).

 

My thought is that  it may not trade as much out of line with the rest of the companies in the same space than people think.

[vince]

Radman, are you saying that because they made a good investment (remember we dont know how great that investment really is because they arent getting much cash up front) that eliminates their responsibility to effectively allocate the rest?

[vince]

So, what’s  GM’s FCF? I get $13.9B cash flow - $8.4B = $5.5B FCF. That is with the current $48B market cap a  11.5% FCF yield. I think there are car suppliers that are actually trading at an even higher FCF yield (LEA being one example, I think they trade at a 12% + FCF yield).

 

My though it they it may not trade as much out of line with the rest of the companies in the same space than people think.

Within that capex number is maybe cash being spent that wouldnt otherwise be spent the same way if better allocators were doing the spending.  In addition, GM's mgmt a couple years ago said very very clearly that fcf would be around 7 billion by now and closer to 10 billion within a couple more years  because capex was elevated then.  And this proves that this is one of the four areas that I suggested wasnt being maximized to the shareholder benefit.  And it is worse than it looks because mgmt's expectations for fcf was before they got rid of Europe.  I guess Harry Wilson, Kyle Bass and Dave Tepper were right to be concerned about how their capital was going to be spent when they threatened to put Harry on the board.

[Gregmal]

That's basically the argument that's made to justify this mediocrity. Well, look at peers, look at the sector, yada, yada, yada.

 

Bottom line is you give 10 different teams $100M you can get wildly different results based on competency and capital allocation. It seems in certain sectors just being in sector is an excuse. It's like the banking sector pre 2008. These guys were just wasteful and kicked the can down the road "just cuz" that's what everyone else was doing. I see autos in the same light, they just waste resources in different ways. And given that IMO GM is/was in much stronger position than their peers, it's even worse that they replicate this behavior and not surprisingly, the poor results. They've been preaching prudence forever now, but guess what? Come next recession they'll tank like everyone else, and then we'll be fed macro excuses. Management will probably leave richer than ever, and the shareholder with the bag.

[Spekulatius]

I looked through some annual reports from car makers and I don’t  really see GM Capex (~$8B on $120B on revenues) sticking out. Even thread favorite FCAU has been investing $8 B Euro with 110B revenues. Ford seems to spent less, but they are struggling more than GM.  Just because some hedge fund armchair CEO think they it’s too much doesn’t make it so. Just look at their track records with Chrysler or Macy or Sears. a gleaned over this quickly, maybe there is some detailed research looking at Capex levels and how it correlated with LT performance in the industry.

[vince]

I looked through some annual reports from car makers and I don’t  really see GM Capex (~$8B on $120B on revenues) sticking out. Even thread favorite FCAU has been investing $8 B Euro with 110B revenues. Ford seems to spent less, but they are struggling more than GM.  Just because some hedge fund armchair CEO think they it’s too much doesn’t make it so. Just look at their track records with Chrysler or Macy or Sears. a gleaned over this quickly, maybe there is some detailed research looking at Capex levels and how it correlated with LT performance in the industry.

 

Spec, with all due respect, why don't you go right to the source...mgmt themselves revealed that 7-7.5 billion is the run rate norm and based on historically wasteful GM practices I wouldnt be surprised if they could get it under that.  Again, I dont need to or care to make this stuff up, I have no horse in this race, I am going strictly by what came out of mgmt's mouth multiple times.  FCF of 7 billion by now and up to 10 in a couple years assuming a normal SAAR....and I believe that was before Europe.  And 1 more time, I dont see it as a terrible result, actually pretty good performance out of that type of business.  But to argue that they are doing a good job with the balance sheet (and make no mistake..that is absolutely their job regardless if someone calls it financial engineering or short term orientation) is craziness.  Like Munger says "if you want the truth follow the incentives". 

[Dalal.Holdings]

Management guided to increased FCF and decreased capex while they were exiting markets such as Europe—yes. But something unexpected has occured since then—Cruise Automation has become a more viable venture-cap type investment that has required capital (call it “growth capex”). That likely explains a good chunk of capex drain and mgmt has brought in Softbank and now Honda to bring in outside capital as well.

 

Thus far, Cruise offers no profits (or even revenue) and has significant, positive capex and so the firm’s FCF is lower than it would be otherwise. Whether you think Cruise is a worthy venture is another discussion.

[vince]

Management guided to increased FCF and decreased capex while they were exiting markets such as Europe—yes. But something unexpected has occured since then—Cruise Automation has become a more viable venture-cap type investment that has required capital (call it “growth capex”). That likely explains a good chunk of capex drain and mgmt has brought in Softbank and now Honda to bring in outside capital as well.

 

Thus far, Cruise offers no profits (or even revenue) and has significant, positive capex and so the firm’s FCF is lower than it would be otherwise. Whether you think Cruise is a worthy venture is another discussion.

 

Well thats a very good point and hard to argue otherwise. Let us assume there was no good reason to squeeze out some capex for other value enhancing purposes, my argument still stands, and strongly in my opinion.  I believe capital allocation would have looked much different if upper management and/or board members had lots of skin in the game.  And I'm sure you can say that about lots of mgmt's, but its not easy to find businesses valued at same low multiple with low debt (and almost no interest or taxes) and 20 billion of cash (and where mgmt claims so confidently that their breakeven is now at an industry level of 10 million units).  It's just a much less risky decision to buyback lots of stock under those circumstances compared to other company mgmt's with similar amounts of personal stock where the multiple is 15 times.  Thanks for all the feedback.

[vince]

I want to make one last point before someone else brings it up.  Gm has negative working capital (excluding all the excess cash) which means they will bleed some cash (mgmt claims 6-7 billion with 25% decrease in units sold) when industry inevitably cycles.  I have taken that into consideration already when debating.  Anyone that hasnt had a chance to read The Outsiders by William Thorndike should go get a copy asap.  One of the main interpretations is that in order to compound the per share value of most businesses by 20 percent you need to actively manage the balance sheet...great operational capabilities will usually only get you half way there.

[Spekulatius]

I want to make one last point before someone else brings it up.  Gm has negative working capital (excluding all the excess cash) which means they will bleed some cash (mgmt claims 6-7 billion with 25% decrease in units sold) when industry inevitably cycles.  I have taken that into consideration already when debating.  Anyone that hasnt had a chance to read The Outsiders by William Thorndike should go get a copy asap.  One of the main interpretations is that in order to compound the per share value of most businesses by 20 percent you need to actively manage the balance sheet...great operational capabilities will usually only get you half way there.

 

Above is true. The counter to “Outsiders thesis “ is that it suffers from survivorship bias. I don’t really disagree that GM could lever up, but I think they aren’t by far the worst, since they bought back considerable amount of stock. My thinking is that if the business makes a decent amount of money and management generally does the right things, the business should become more valuable - no heroes moves required. Sometimes, the market goes cold on certain business and it can take years. just look at DISCA ( I know it’s up recently, but it’s still a crappy stock when held for 5 years, despite copious buybacks). I personally kind of like investing in value traps where IV is higher than market cap and goes up nicely and Mr. Market doesn’t notice. If course often one is wrong one way or another, but even then, the losses are mostly opportunity cost and winner can work out very nicely. Sometimes, years of patience is required.

 

 

FWIW, thr Capex in 2017 appears elevated in in prior years, Capex was $6.X, so maybe it’s and outlier? Capex should go down now that Opel is gone, even with Cruise picking up (which is probably consuming more R&D than Capex $ right now).

[Dalal.Holdings]

R&D and such expenses from Cruise would negatively hit Op Cash Flow. The capital spend on items such as the vehicles, LIDAR, etc would likely go under capex...either way, it's a hit to FCF.

 

GM bought Cruise for like $1B and change 2.5 years ago and now it's valued close to $15B. Even with $1-2B investment by GM in this venture per year over 2.5 years, that's an astounding return on investment if you take that valuation into consideration. There are pretty much no other expenditures of cash (even buybacks at current levels) that would yield such returns over such a short time period.

 

Unfortunately, impactful buybacks (decrease in share count) will likely not meaningfully occur while GM owns Cruise as these days, to compensate people who work at firms like Cruise in places like the SF Bay Area, you often need to issue stock.

 

The hope is that Cruise continues its meteoric rise. It sure has a long runway--looking at those supposed "analyst" valuations for Waymo at $175B, Cruise's $15B is peanuts. Then there could be an eventual IPO or some other means of giving all those massive returns on invested capex back to shareholders (Waymo's "valuation" is more than 3x all of GM's market cap today). But that will first take some big milestones for Cruise to achieve. Or maybe Cruise will become a big cash generating biz right off the bat and GM may not need to sell...who knows.

[Spekulatius]

^ Good comments. the way I see it, you get the free Cruise Option and a business that itself is cheap when buying GM. My sense is that Cruise has the advantage of being car company and less aloof than the GOOG folks. I think a company like Apple may actually better a bring an autonomous  driving system to market than GOOG. This isn’t just a software problem. I don’t  think that Waymo is even close to being worth $175B.

 

FWIW, these LIDAR systems need fairly high spec optical/ sensor sytems. It’s will be a major  challenge to bring the prices down to mass market level.

[vince]

R&D and such expenses from Cruise would negatively hit Op Cash Flow. The capital spend on items such as the vehicles, LIDAR, etc would likely go under capex...either way, it's a hit to FCF.

 

GM bought Cruise for like $1B and change 2.5 years ago and now it's valued close to $15B. Even with $1-2B investment by GM in this venture per year over 2.5 years, that's an astounding return on investment if you take that valuation into consideration. There are pretty much no other expenditures of cash (even buybacks at current levels) that would yield such returns over such a short time period.

 

Unfortunately, impactful buybacks (decrease in share count) will likely not meaningfully occur while GM owns Cruise as these days, to compensate people who work at firms like Cruise in places like the SF Bay Area, you often need to issue stock.

 

The hope is that Cruise continues its meteoric rise. It sure has a long runway--looking at those supposed "analyst" valuations for Waymo at $175B, Cruise's $15B is peanuts. Then there could be an eventual IPO or some other means of giving all those massive returns on invested capex back to shareholders (Waymo's "valuation" is more than 3x all of GM's market cap today). But that will first take some big milestones for Cruise to achieve. Or maybe Cruise will become a big cash generating biz right off the bat and GM may not need to sell...who knows.

 

Dalal, I'm not so sure I would count that 15 billion just yet, much of the cash is on the backend.  But yes definitely looks like a great investment, however I'm not so sure it was a better risk adjusted return LOOKING FORWARD at that time (it was a relatively small investment so it is a hard comparison...they would never put 15 billion into a venture like that but they definitely could have in their equity) even though it has certainly worked out that way.  Lastly, there was nothing to stop them from doing more aggressive repurchases at the same time.  And the buybacks i'm talking about where they use some of their 20 billion dollar pile, some fixed term debt and other actions they could have taken would not have been or will not be affected materially by the cruise acquisition.  I think I have heard every great investor say that the place to look for owner oriented capital allocation is where mgmt has significant skin in the game.  It's not like I'm rewriting the bible here.  I think it's pretty obvious that they dont think like owners because they arent owners.  And in this case the opportunity cost is magnified because all the ingredients were there...ridiculous amount of excess cash, very low debt, best interest rates in 50 years, soooo much low hanging fruit in an obese organization and a very cheap stock price. 

 

[Gregmal]

Thats the thing, they bought Cruise with what? 2 months of FCF? Great, but they've by and large completely mismanaged capital allocation. That's pretty much the only thing they can point to over the past half decade. The Lyft investment is immaterial IMO.

 

Go look back at this thread. I was long a big supporter of Barra. But at this point it's inexcusable. After all the rhetoric during the proxy fight about how great they are and how much they've done for shareholders... it's all a crock. How about this stop issuing shares! Maybe you need to for Cruise, sure, NONE at the GM.

 

Everyone says Buffett endorses GM? Well BRK has 100B in cash. They are dying for a deal. Why hasn't BRK stole this yet if it's such a no brainer? I still think this is salvageable but there is no excuses anymore and it's time to stop making excuses for why value isnt being created. It's one thing if, as some used to point out, their China business is being valued at 0. But now on trade war fears they lose $10 a share? Things just arent adding up and these sort of things can go from cheap, to value trap real quick, especially in a cyclical, capital intensive business like this.

[cmlber]

Lastly, there was nothing to stop them from doing more aggressive repurchases at the same time.  And the buybacks i'm talking about where they use some of their 20 billion dollar pile, some fixed term debt and other actions they could have taken would not have been or will not be affected materially by the cruise acquisition.  I think I have heard every great investor say that the place to look for owner oriented capital allocation is where mgmt has significant skin in the game.  It's not like I'm rewriting the bible here.  I think it's pretty obvious that they dont think like owners because they arent owners.  And in this case the opportunity cost is magnified because all the ingredients were there...ridiculous amount of excess cash, very low debt, best interest rates in 50 years, soooo much low hanging fruit in an obese organization and a very cheap stock price.

 

Failure to buy back stock doesn't look like that bad of a decision in hindsight, the stock hasn't moved in 5 years, the opportunity still exists...

 

The bigger capital allocation miss was not acquiring FCAU when they had the chance.  FCAU's market cap when Sergio did the Capital Junkie presentation was I think around $18Bn.  Now it's worth 2x that and the synergies would be massive.  Sergio's estimate was $5B+ per year...  They laid out the case very clearly, there is so much capital waste with every OEM developing the same technologies. 

 

But GM didn't even entertain the thought because they were "busy merging with themselves."  Which is code for "we have no stock so no upside if this works out and all downside if it doesn't, plus it creates extra work for us." 

[Gregmal]

Lastly, there was nothing to stop them from doing more aggressive repurchases at the same time.  And the buybacks i'm talking about where they use some of their 20 billion dollar pile, some fixed term debt and other actions they could have taken would not have been or will not be affected materially by the cruise acquisition.  I think I have heard every great investor say that the place to look for owner oriented capital allocation is where mgmt has significant skin in the game.  It's not like I'm rewriting the bible here.  I think it's pretty obvious that they dont think like owners because they arent owners.  And in this case the opportunity cost is magnified because all the ingredients were there...ridiculous amount of excess cash, very low debt, best interest rates in 50 years, soooo much low hanging fruit in an obese organization and a very cheap stock price.

 

Failure to buy back stock doesn't look like that bad of a decision in hindsight, the stock hasn't moved in 5 years, the opportunity still exists...

 

The bigger capital allocation miss was not acquiring FCAU when they had the chance.  FCAU's market cap when Sergio did the Capital Junkie presentation was I think around $18Bn.  Now it's worth 2x that and the synergies would be massive.  Sergio's estimate was $5B+ per year...  They laid out the case very clearly, there is so much capital waste with every OEM developing the same technologies. 

 

But GM didn't even entertain the thought because they were "busy merging with themselves."  Which is code for "we have no stock so no upside if this works out and all downside if it doesn't, plus it creates extra work for us."

 

Exactly. And for the record I was against the merger and trusted Barra and was 100% wrong.

[merkhet]

Failure to buy back stock doesn't look like that bad of a decision in hindsight, the stock hasn't moved in 5 years, the opportunity still exists...

 

The bigger capital allocation miss was not acquiring FCAU when they had the chance.  FCAU's market cap when Sergio did the Capital Junkie presentation was I think around $18Bn.  Now it's worth 2x that and the synergies would be massive.  Sergio's estimate was $5B+ per year...  They laid out the case very clearly, there is so much capital waste with every OEM developing the same technologies. 

 

But GM didn't even entertain the thought because they were "busy merging with themselves."  Which is code for "we have no stock so no upside if this works out and all downside if it doesn't, plus it creates extra work for us."

 

Actually, it was $10 billion based on a speech he gave at his alma mater.

[nkp007]

Lastly, there was nothing to stop them from doing more aggressive repurchases at the same time.  And the buybacks i'm talking about where they use some of their 20 billion dollar pile, some fixed term debt and other actions they could have taken would not have been or will not be affected materially by the cruise acquisition.  I think I have heard every great investor say that the place to look for owner oriented capital allocation is where mgmt has significant skin in the game.  It's not like I'm rewriting the bible here.  I think it's pretty obvious that they dont think like owners because they arent owners.  And in this case the opportunity cost is magnified because all the ingredients were there...ridiculous amount of excess cash, very low debt, best interest rates in 50 years, soooo much low hanging fruit in an obese organization and a very cheap stock price.

 

Failure to buy back stock doesn't look like that bad of a decision in hindsight, the stock hasn't moved in 5 years, the opportunity still exists...

 

The bigger capital allocation miss was not acquiring FCAU when they had the chance.  FCAU's market cap when Sergio did the Capital Junkie presentation was I think around $18Bn.  Now it's worth 2x that and the synergies would be massive.  Sergio's estimate was $5B+ per year...  They laid out the case very clearly, there is so much capital waste with every OEM developing the same technologies. 

 

But GM didn't even entertain the thought because they were "busy merging with themselves."  Which is code for "we have no stock so no upside if this works out and all downside if it doesn't, plus it creates extra work for us."

 

Every day that GM does not buy Fiat and recognize these easy synergies is a complete failure of capitalism. It's an obvious move and GM can use cheap leverage. For some reason, there's no boldness from management. I miss Sergio. 

[Ahab]

Loving everyone's thoughts about GM these past few days. Speculative comment...I think it would be smart for GM to up its stake in Lyft. Having a large ride-sharing platform in addition to Cruise might prove quite useful in the years ahead.

[Spekulatius]

Lastly, there was nothing to stop them from doing more aggressive repurchases at the same time.  And the buybacks i'm talking about where they use some of their 20 billion dollar pile, some fixed term debt and other actions they could have taken would not have been or will not be affected materially by the cruise acquisition.  I think I have heard every great investor say that the place to look for owner oriented capital allocation is where mgmt has significant skin in the game.  It's not like I'm rewriting the bible here.  I think it's pretty obvious that they dont think like owners because they arent owners.  And in this case the opportunity cost is magnified because all the ingredients were there...ridiculous amount of excess cash, very low debt, best interest rates in 50 years, soooo much low hanging fruit in an obese organization and a very cheap stock price.

 

Failure to buy back stock doesn't look like that bad of a decision in hindsight, the stock hasn't moved in 5 years, the opportunity still exists...

 

The bigger capital allocation miss was not acquiring FCAU when they had the chance.  FCAU's market cap when Sergio did the Capital Junkie presentation was I think around $18Bn.  Now it's worth 2x that and the synergies would be massive.  Sergio's estimate was $5B+ per year...  They laid out the case very clearly, there is so much capital waste with every OEM developing the same technologies. 

 

But GM didn't even entertain the thought because they were "busy merging with themselves."  Which is code for "we have no stock so no upside if this works out and all downside if it doesn't, plus it creates extra work for us."

 

Every day that GM does not buy Fiat and recognize these easy synergies is a complete failure of capitalism. It's an obvious move and GM can use cheap leverage. For some reason, there's no boldness from management. I miss Sergio.

 

The $10B synergy between GM and FCAU seems exaggerated. It would be roughly 5% of the combined revenues. I also think there is a high risk that the merger wouldn’t go though.

[JRM]

Loving everyone's thoughts about GM these past few days. Speculative comment...I think it would be smart for GM to up its stake in Lyft. Having a large ride-sharing platform in addition to Cruise might prove quite useful in the years ahead.

 

Lyft is trying to IPO as quickly as they can (before the stage coach turns into a pumpkin).  I don't think GM is aligned with Lyft as a strategic partner like they were when they made their initial investment.  Lyft has hedged themselves by partnering with Waymo.  It will be interesting to see how GM plans to go about building its network.  They still own Maven, but that one seems like a non-starter so far.  There are plenty of competing apps in the car-sharing space.

 

Uber and Lyft should be worried that GM scales its autonomous taxi fleet first and is able to start building a network.  That would obsolete their business model quickly.

[RadMan24]

Radman, are you saying that because they made a good investment (remember we dont know how great that investment really is because they arent getting much cash up front) that eliminates their responsibility to effectively allocate the rest?

 

 

I’m not quite sure I see their errors outweighing their positive actions:

 

They got out of Europe which will require substantial investment to develop EV technologies before rest of world, as diesel is dead;

 

they invested heavily in 1500 trucks and large SUVs which are now about to bear fruit over the next five plus years, a dominate position they maintain after maintaining investment in both categories during recession and it paid of hugely;

 

the Silverado and Sierra are the best trucks GM has ever made, the golden egg for everything else done at this company;

 

after a hugely successful reentry into the midsize truck segment they are now reentering the medium duty truck market which they had to abandon during recession;

 

they own cruise and have developed a strong ev enterprise and fuel cell development, which in of itself opens the door to military and defense sectors;

 

Strong development of mid engine corvette which is GM’s Tesla when it’s time for electrifying sport cars.

 

I’m more curious on the specific instances of poor capital allocation for which you are implying. All of the above , further including the soon to be one new Caddy every six months and new Chevy blazer, have yet to boost GM cash flow and earnings.

 

The list of great allocation of capital is fairly long. The list of mistakes is fairly short.

 

The auto cycle requires a good deal of capital at the moment but it will tapper off in the future, notwithstanding the fact that this is a horrible industry to be in and price sensitive to the extreme.

 

Even cruise is dead weight at the moment (in terms of fcf) but would you rather GM own it or sell it to Apple or a competitor and take that risk?

 

I’ve been long since 2012 during European Debt crisis. The fallout of South American economies also hurt GM over the past three years. Middle East hurt as global oil prices sank. Ignition key crisis didn’t help. China is now softening a bit and NA has peaked for the moment.

 

GM’s stock price is unchanged is because the market keeps placing a smaller multiple on its earnings. The play on GM is when the market opens its eyes and see that it’s not all gloom and doom and swings to the other side.

[vince]

RedMan, reread the thread, you are talking past me.  I agree that they did a pretty good job but they could have done all that AND work the balance sheet.  I also agree that the stock price will take care of itself eventually and wouldnt mind if it stayed at same price even after the buybacks...because by now they would have been in a position to either continue the buyback at an even cheaper market cap or the stock would have increased. Either way they would have locked in that created value. And I guess thats the point.  When you have all the ingredients AND a very cheap stock its a no brainer, low risk way to enrich remaining owners.  And I believe the multiple will correct at some point and returns will be reasonably good, however why not make them great? I wont repeat why they didnt, its obvious

[vince]

Lastly, there was nothing to stop them from doing more aggressive repurchases at the same time.  And the buybacks i'm talking about where they use some of their 20 billion dollar pile, some fixed term debt and other actions they could have taken would not have been or will not be affected materially by the cruise acquisition.  I think I have heard every great investor say that the place to look for owner oriented capital allocation is where mgmt has significant skin in the game.  It's not like I'm rewriting the bible here.  I think it's pretty obvious that they dont think like owners because they arent owners.  And in this case the opportunity cost is magnified because all the ingredients were there...ridiculous amount of excess cash, very low debt, best interest rates in 50 years, soooo much low hanging fruit in an obese organization and a very cheap stock price.

 

Failure to buy back stock doesn't look like that bad of a decision in hindsight, the stock hasn't moved in 5 years, the opportunity still exists...

 

The bigger capital allocation miss was not acquiring FCAU when they had the chance.  FCAU's market cap when Sergio did the Capital Junkie presentation was I think around $18Bn.  Now it's worth 2x that and the synergies would be massive.  Sergio's estimate was $5B+ per year...  They laid out the case very clearly, there is so much capital waste with every OEM developing the same technologies. 

 

But GM didn't even entertain the thought because they were "busy merging with themselves."  Which is code for "we have no stock so no upside if this works out and all downside if it doesn't, plus it creates extra work for us."

 

Exactly. And for the record I was against the merger and trusted Barra and was 100% wrong.

 

I was feeling the same way but that was a harder decision with more risk in my opinion whereas my proposal was just a complete no brainer with zero execution risk.  I have also lost trust with mgmt and no longer own it