http://news.yahoo.com/s/nm/20051110/bs_nm/autos_gm_shares_dc
DETROIT (Reuters) - Shares of General Motors Corp. (NYSE:GM - news) fell more than 6 percent on Thursday, spiraling to a 23-year low, after Banc of America Securities warned of an increased risk of bankruptcy at the financially struggling auto giant.
The stock's decline -- which could add to pressure on Chairman and Chief Executive Rick Wagoner to launch a more aggressive revival plan for the automaker -- also came after it said late on Wednesday that it had overstated financial results for 2001 by as much as $400 million.
GM said the accounting error stemmed from the way it booked credits from suppliers. The accounting for credits from suppliers was one of the reasons GM was recently targeted for investigation by the
Securities and Exchange Commission, the company said.
In a note to clients, Banc of America analyst Ron Tadross said he was cutting his target price on GM to $16 from $18.
Citing "increasing evidence that hidden liabilities exceed hidden assets" at GM, Tadross also said he was raising its risk of bankruptcy over the next two years to 40 percent from 30 percent.
"Existing liquidity may only be enough to get through a bankruptcy reorganization," Tadross said.
GM shares were down $1.68, or 6.78 percent, at $22.96 in mid-morning trading on the New York Stock Exchange after falling to a 13-year low on Wednesday.
The Detroit-based Old Economy icon has lost about $3 billion this year as it grapples with high health-care and commodities costs, a steady erosion of U.S. market share and sputtering sales of big sport utility vehicles, its longtime cash cows, due to high gasoline prices.