Toyota stock

[disneysteve]

Stock is up over $2 today. It may have dropped as far as it is going to. Time will tell.

[Broken Arrow]

Stock is up over $2 today. It may have dropped as far as it is going to. Time will tell.

Yeah, it's quite the snap-back, considering that the overall market is bleeding red today. As a fast trade, now isn't a bad time to get out of it.

[marvholly]

I am just waiting to see all the individual AND insurance company lawsuits that are/will be filed by anyone even close to having had a problem of any sort w/any model. I do NOT think we have seen the last of the problems. It appears quality control has gone down the tubes for a number of years in the name of profit. This is a major change in corp culture going back quite a few years that will need to be altered again and will take years again.

I think w/more & more coming out in the news almost daily Toyota is going to have MAJOR ongoing issues for the shortterm foreseeable future.

Lawsuits will take YEARS to settle out and will greatly affect the company’s ability to pay ANY dividends. Any lawyer worth his salt WILL get an injunction against any such payment to insure that the funds are there to pay off all the claims. In addition costs will go up: Additional mfg costs, quality control costs, advertising costs and probably rebate/incentive/financing “deals” to try to regain market share.

[Slug]

I'd like to see the yield up at 2.5% before I jump in. That's 58, and I'm not sure it's dropping there.

I own 2 Toyotas. Love'em. Hopefully, this news will push down resales so I can get a used 2010 4Runner next year at a good deal.

[Broken Arrow]

The stock contracted 1.8% today, but I think what may end up being a bigger influence is the persisting European sovereign debts. Of course, that will affect the entire stock market, and not just TM.

[cheerio]

It is going to take a little time for me to look at this stock, public image will atake a while for this to recover, bad public image means low sales and low stock price

[elessar78]

It is going to take a little time for me to look at this stock, public image will atake a while for this to recover, bad public image means low sales and low stock price

Right, which is why it would be a good buy "now" (if the price dropped another $25 or so) and not in the potentially long while it takes to recover. The bad public perception (which should not reflect reality in this case) is exactly what you want so it drives the stock price down for no relevant reason.

[Broken Arrow]

Ugh. Looks like the market is already pricing Toyota back. Toyoda has already announced a global, mass recall, and yet, the stock is going up 1.7% at this point.

Well, I think part of it is the fact that Honda has also come out and announced a large recall to fix their air bags. TM and HMC have been going back and forth throughout this recall story. HMC is currently at -2% today.

I don't know about you guys, but as it currently stands, both are looking less and less appealing. Neither company seems like it's going to be on a good sale anytime soon.

[disneysteve]

Neither company seems like it's going to be on a good sale anytime soon.

I agree. As I kind of suspected, people aren't going to abandon Toyota just because of the gas pedal thing or the Prius thing. It is still a great company that makes great cars (I've got 2 of them) and will continue to do so. This is just a little speed bump along the way.

[Beppington]

Just curious if a major recall like this would affect a car company with Toyota's reputation for reliability in the long long run?

I doubt many can predict this. After all, how many people that experienced a Honda CVCC in the 70's could've predicted they'd be making the quality cars they are today? Can you say "rust bucket"?!!

[elessar78]

Seems like Toyota is going to take a huge PR hit. I read in the Washington Post today that investigators have found dishonesty and cover ups in terms of the extent of the purpose of the recall. I think someone mentioned it already on this thread, but what wasn't said that was that Toyota was being sneaky about it.

If so, this is going to be another one of those cases where the cover up actually worsens the effect than just out right admitting the mistake(s). Even sadder in this case, because Toyota had such a sterling reputation and brand recognition.

In the bigger picture, it's a bad time for this to come out because of a resurgent Ford Motor Co., who seems to be making better and better cars (the new Taurus and Fusion recently caught my eye) and have been getting good reviews.

[cptacek]

The head of Toyota will be going before the board of directors of another car company to answer questions about his company, and those board of directors have the power to fine him, arrest him, deport him or put him in prison. Of course, I am talking about Congress and GM.

Does anyone else think that is a very bad idea?

I read today that the recall issue may cost Toyota as much as $5.5 billion.

Toyota has about 1.57 billion shares outstanding.

Call it $10 billion very bad hell-in-a-handbasket worst case.

That's about $6.37 per share drop.

Any drops further than that from the pre-recall share prices would be either 1) due to poor financial performance or
2) overreaction to the recall news

Toyota's been trading in the 70's for much of the past 12 months, so I don't think it would hit the low 60's because of this at all.

[disneysteve]

Big story on the news today about a Prius gas pedal getting stuck on the highway. The guy was over 90mph and a cop was able to get in front of him and bring the car to a stop. That won't help matters with Toyota.

Beppington, you are so right about the older cars. Hyundai is the same way. The product they sell today is 1,000 times better than what they sold 20 years ago.

[GrimJack]

The interesting part of the Prius story is that the driver could not put the car in neutral nor turn the engine off. He had to get the car's speed down below 55 before the car could be turned off. It makes sense in that turning the car cuts all the power assist (like brakes and steering) but it implies an interlock (correct term??) between computer and all the different functions that may point back to the previous problems that had been blamed on faulty pedals and/or poor carpeting.

Toyota cars have the equivalent of a black box that records various statuses (stati?) before and after a crash but the company makes odd claims about what is and is not recorded. The data may be subpoenaed in the near future. I don't know what to think about the company any more - I owned and loved a Corolla Al-trac for 18 years.