GM Loses A Staggering $39 Billion

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Talk about the type of numbers investors don’t want to see: GM has reported a quarterly loss of $39 billion! The loss is related to certain tax charges, and is much bigger than what analysts expected.

The loss was attributed to a $38.6 billion noncash charge largely related to establishing a valuation allowance against accumulated deferred tax credits in the U.S., Canada and Germany, as well as mortgage losses at GM’s former financial arm, GMAC Financial Services.

But accounting rules require that companies expecting to keep losing money cannot keep carrying deferred tax credits indefinitely and must write down the value of such credits.

The net loss amounted to $68.85 per share, compared with a net loss of $147 million, or 26 cents per share, in the third quarter of last year.

The company is still selling a lot of cars, but it’s losing money on many deals. GM lost $247 million, even without the charges.

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