Chuck had already talked about the subject here. But apparently the message is not passing through.

GM (GMGMQ.PK) the delisted stock of the “old” GM is currently trading as a pink sheet and is experiencing extreme price variations for a stock that is worthless. The “Q” indicates the company is in bankruptcy proceedings.

Today for instance its price rose by 36 %!

Chuck mentioned something about people jumping on board based on scam feeders, but I was hugely surprised to see an article published on Seekingalpha that basically maintains this huge confusion by launching the article in this style:

It may take awhile to convince car buyers, but General Motors (GMGMQ.PK) has emerged from bankruptcy with better prospects for a profitable future than virtually any of the automaker’s critics predicted a few months ago. Here’s why:

Mentioning the stock ticker and not warning in any place in the article that the current stock is worthless is a huge negligence… How many poor investors are going to be skinned in believing that this stock really is the “new” GM?

The fact was even compounded by the fact that today it was announced that GM just “exited chapter 11″. The WSJ had buried very far down in its lead article this important information (emphasis added):

Though the new GM will not be a publicly traded company initially, Mr. Henderson stressed that GM will remain transparent in its financial reporting.

The confusion between the “new” GM and the stock traded is thus being unfortunately maintained for the man on the street without sufficient legal or financial knowledge.

Lack  of knowledge about the elementary mechanisms of bankruptcy does the rest and pulls many innocent investors into a deadly trap, allowing swindlers of all sorts to make a profit on their backs.

There is a serious issue with the US stock market authorities that allow the equity of bankrupt companies to be traded even after chapter 11 proceedings are begun.

Even Jim Cramer was yelling today on CNBC in his typical bombastic style about the nonesense of continuing to list GM’s stock…

So, I’ll add in my little stone: avoid trading GMGMQ.PK!

This stock is destined to be definitely delisted and will wipe out any equity. Even after bankruptcy, GM emerges with 48 BN USD in debt.

For more info on what is a bankruptcy in the US legal system check out Investopedia.