How Will Market React To GM, Bank of America News?

GM details plans to wipe out current shareholders (Reuters)
[emphasis mine]

"General Motors Corp on Tuesday detailed plans to all but wipe out the holdings of remaining shareholders by issuing up to 60 billion new shares in a bid to pay off debt to the U.S. government, bondholders and the United Auto Workers union.

"The unusual plan, which was detailed in a filing with U.S. securities regulators, would only need the approval of the U.S. Treasury to proceed since the U.S. government would be the majority shareholder of a new GM, the company said.

"Once GM has issued new shares to pay off its debt to the U.S. government, bondholders and its major union, it said it would then undertake a 1-for-100 reverse stock split."

Bank of America to need $34 billion in capital: source (Reuters)

"Bank of America has been deemed to need an additional $34 billion in capital, according to the results of a government stress test, a source familiar with the results said on Tuesday.'

Dow futures -83 as of 22:16 EST.
GM shares ended the regular session at $1.85, but dropped to $1.66 in after hours.
BAC shares ended the regular session at $10.84, and ended $10.86 in after hours.

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