Greenlight Capital Proposes GM Change Capital Structure to Unlock Substantial Shareholder Value

Greenlight Capital, Inc. (“Greenlight”) today announced a Plan that it believes would unlock substantial value for General Motors Co. (NYSE: GM) (the “Company”) shareholders without changing GM’s business strategy, capital allocation priorities or financial policy. The Plan would split GM’s common stock into two classes: one that would receive the current dividends and one that would participate in the remaining earnings and cash flows and future growth of the Company.

A presentation regarding the Plan’s strategic merits and rationale is available for download at www.greenlightcapital.com.

David Einhorn, President of Greenlight, said: “As significant, long-term shareholders, we believe in GM’s strong earnings potential. Our Plan would unlock significant value and lower GM’s cost of capital. It would provide the Company complete strategic flexibility without adding any default, refinancing, or balance sheet risk. We encourage our fellow GM shareholders to carefully review the presentation and to urge GM’s management and Board to adopt this compelling Plan.”

Strategic Rationale

Greenlight believes that adopting this Plan would lower GM’s cost of capital, improve its financial flexibility, and unlock between $13 billion and $38 billion of shareholder value.

The Company’s diverse shareholder base currently consists of a mix of value-focused and income-oriented investors united by their confidence in GM’s prospects, but with different investment objectives. The disparity in investment objectives has led to a sub-optimal shareholder base.

At its current trading value, the Company’s price/earnings ratio is approximately 5.6x and ranks as the lowest price/earnings ratio among all S&P 500 companies. GM’s shares trade at a 4.4% dividend yield despite a 24% dividend payout ratio. The shares are barely above the 2010 IPO price despite strong operating results and an equity bull market. Accordingly, GM has failed to create much long-term shareholder value. GM can fix this.

The Plan involves the creation of two classes of common stock. The two classes, which would trade separately, would have the following characteristics:

• The Dividend Shares: GM would continue to pay quarterly dividends at the current annual rate of $1.52 per share, but the dividends would now be paid on the “Dividend Shares” instead of the existing common stock. The Dividend Shares would be distributed to GM’s existing shareholders at no cost. The Dividend Shares would appeal to yield-focused investors.
• The Capital Appreciation Shares: GM would grant its existing common stock the majority of the voting rights and participation in the rest of the Company’s earnings, cash flows, share buybacks and future growth. The Capital Appreciation Shares would appeal to and be valued appropriately by investors focused on GM’s growth prospects.

About Greenlight Capital, Inc.

Greenlight Capital, Inc. (“Greenlight”), founded in 1996, is a value-oriented investment advisor that primarily invests and trades in long and short publicly listed equity securities, as well as distressed debt when cyclically attractive. Greenlight seeks to achieve capital appreciation by buying securities with trading values materially lower than their intrinsic values and by selling short securities with trading values materially higher than their intrinsic values. Greenlight aims to achieve high absolute rates of return while minimizing the risk of capital loss.

Warning Regarding Forward Looking Statements

THIS PRESS RELEASE CONTAINS FORWARD LOOKING STATEMENTS. FORWARD LOOKING STATEMENTS CAN BE IDENTIFIED BY USE OF WORDS SUCH AS "OUTLOOK", "BELIEVE", "INTEND", "EXPECT", "POTENTIAL", "WILL", "MAY", "SHOULD", "ESTIMATE", "ANTICIPATE", AND DERIVATIVES OR NEGATIVES OF SUCH WORDS OR SIMILAR WORDS. FORWARD LOOKING STATEMENTS IN THIS PRESS RELEASE ARE BASED UPON PRESENT BELIEFS OR EXPECTATIONS. HOWEVER, FORWARD LOOKING STATEMENTS AND THEIR IMPLICATIONS ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR AS A RESULT OF VARIOUS RISKS, REASONS AND UNCERTAINTIES. EXCEPT AS REQUIRED BY LAW, GREENLIGHT CAPITAL, INC. AND ITS AFFILIATES AND RELATED PERSONS UNDERTAKE NO OBLIGATION TO UPDATE ANY FORWARD LOOKING STATEMENT, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE DEVELOPMENTS OR OTHERWISE.

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