General Motors Co. CEO Dan Akerson bought 25,000 GM shares at $20.35 a share, with a value of about $500,000, according to a regulatory filing posted this week. Just a few days ago, Akerson pledged to be "relentless" in reviving the automaker so his purchase is just further proof of his commitment to the company.
This means that Akerson’s holdings are now at 272,828 shares, worth around $5.6 million. This purchase is being perceived as a vote of confidence in GM shares, which have stayed at about $20 for nearly the past two months. This stock is staying at about 40% lower than its IPO price in November 2010. GM has yet to release an official statement about Akerson's stock purchase.
When Akerson had talked with analysts last week about the company’s results in the second quarter, he shared that he was frustrated about its performance. He admitted that in plenty of key metrics, GM is “worse off” compared to one year ago. He said that his leadership team doesn’t find this acceptable and so the teams will have to stay on top of the situation.
For the second quarter, GM reported a net profit of $1.49 billion, which is 41% lower than the year-earlier period. GM continues to struggle due to the persistent losses in Europe. Its share in the U.S. market has also declined.
Barclays Capital analyst Brian Johnson made a research note last week that states that GM’s shares will continue to be weighed down by losses in Europe. In addition, he said that profitability in North America will be squeezed in the third quarter due to lower truck production, as GM prepares its plants for the next generation of pickups and SUVs.