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Ketchup Economics!

Here is a $500,000,000 bill lying on the sidwewalk:

Bernard Simon: Shares in old GM climb to value 'worthless' company at $500m: The old General Motors died in a US bankruptcy court last summer. But its shares remain very much alive. So alive that as the rest of Wall Street took its biggest tumble of the year on Friday, shares of the old GM, now known as Motors Liquidation Company, gained another 3 per cent, giving the legacy company a market value of close to $500m (£306m). In spite of repeated warnings from the restructured GM, the Securities and Exchange Commission and others that the shares are worthless, Motors Liquidation has surged from 47 cents at the start of the year to 77 cents on Friday. Someone has made a tidy killing.

Motors Liquidation, which remains in Chapter 11 bankruptcy protection, holds about 200 properties and more than 500,000 contracts abandoned by GM during its court-supervised restructuring. The winding down is expected to take several years, and liabilities are sure to dwarf whatever is raised from asset sales. "It's been a challenge to get through to people that these are not shares in the new company," GM said. The Motors Liquidation name was adopted as part of the effort to distinguish the old and new GMs.

The new GM is a private company, with almost three-quarters of its equity held by the US and Canadian governments, and the rest by a union healthcare fund and old GM bondholders. A public share offering is possible later this year, if all goes well.

Cromwell Coulson, chief executive of the Pink Sheets over-the-counter market where the Motors Liquidation shares trade, identifies three groups that have kept the pot boiling. With 611m shares outstanding, Motors Liquidation is an obvious target for day traders, who aim to make a quick profit from heavily traded, volatile counters. More than 10m Motors Liquidation shares changed hands on Friday. Mr Coulson also singles out investors who sold short as GM headed for bankruptcy last year and must now cover their positions. Finally, some investors, it seems, have yet to get the message that the shares are worth nothing.

"[Motors Liquidation] could discover oil on one of their properties, weird things can happen," Mr Coulson says sardonically. "A market can't regulate the intelligence of investors."