June 2009, Issue #38

GM, a bankruptcy in the making.

Oh how the mighty have fallen. GM joins the ranks of Lehman Brothers and Chrysler in bankruptcies of mighty proportions. As we look back, GM seemed to be hopeless in this era. Its high wage and union problems, forgettable cars and poor leadership led many consumers to buy Japanese and German cars for their durability, styling and prices. GM was left in the dust with its extra baggage, as it slowly lost its market share in the United States.

However, GM seemed to have a spark before its ultimate collapse. They changed the way consumers thought about American cars. Instead of large gas-guzzling behemoths, there were new energy efficient cars with bio-fuels and hybrids. Cars such as the Camaro and Volt were (and are) promising to the company's new lineup.

Surprisingly, GM shares have soared since landing in the Pinksheets. In regular bankruptcy proceedings, the shares are usually canceled when new shares are issued and the old shares are generally worthless. Are people disillusioned by the government's promise that GM will be "saved"? Nobody knows when the bankruptcy court will cancel the shares, so for those looking to make a quick buck on GMGMQ, proceed with extreme caution.

Now GM enters a new chapter though its "re: invention". GM will have fewer brands, less debt, a focus on the consumer and it seems something great may come out of it. But are we to believe GM will be revamped with the United States government owning more than half of the company? Only time will tell.

On the Roadmap
We should be completing development on a new interactive chart within the next few weeks, hopefully before the next issue of the newsletter hits.

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A Quick Look @ DeVry Inc. (NYSE: DV)
In every issue we take a quick look at a stock that has been in the news. Feel free to make suggestions as to what stock you would like to see covered next by sending an email to editor@firstrade.com, or the editor will pull a random symbol out of a hat.

This month we take a look at DeVry Inc., which through its wholly owned subsidiaries, own and operate a variety of educational institutions found in many states for post-secondary education. Despite being the subject of some jokes for its television commercials, it had proven itself as a business model, replacing GM in the S&P 500. Founded in 1931 as DeForest Training School, DeVry has gone through many name changes and has expanded their school from engineering technology, into business, liberal arts, media arts and health sciences. DeVry has seen their profits rise steadily, as the recession has created a high demand for retraining. DeVry has a market capitalization of 3.26 billion. Since the announcement, shares of DeVry have gone up 4.5% and it has rebounded more than 20% since early May. Let's take a look at some key events.



Key Events:

1. 1931: Founded by Dr. Herman DeVry, it was named DeForest Training School.
2. 1953: Changed its name to DeVry Technical Institute.
3. 1966: Was acquired by Bell and Howell Education Group.
4. 1968: Changed its name to DeVry Institute of Technology.
5. 1973: Keller Graduate School of Management founded as the CBA Institute.
6. 1974: CBA Institute becomes Keller Graduate School of Management.
7. 1987: Through the merger of DeVry Institute and Keller Graduate School of Management, DeVry Inc. was formed.
8. 1991: DeVry Inc. is publicly offered on the NASDAQ exchange.
9. 1995: DeVry Inc. stock is traded on NYSE.
10. 1996: DeVry Inc. stock is listed on the Chicago Stock Exchange and acquires Becker CPA Review for education in accounting and finance.
11. 2000: Offers a bachelor’s degree program in business administration online.
12. 2003: Acquired Ross University, a medical and veterinary school.
13. 2005: Acquired Deaconess College of Nursing.
14. 2009: Replaces GM in the S&P 500.