GM shares fall amid cash flow fears

General Motors Corp. shares fell 11.5% in Monday trading after analysts said the automaker's plan to draw the remaining $3.5 billion from a revolving credit line indicated it may be using up available funds at a rapid pace.

The stock price fell even though GM was among 137 companies added to the list of companies whose stock could not be sold short.

That safety net was not enough to shake concerns that the automaker's cash reserves could run low, which prompted Goldman Sachs to cut its ratings on GM stock and Fitch Ratings to cut GM's credit rating.

Citigroup and others cited Friday's late-afternoon borrowing as a cautionary — if perhaps shrewd — move.

"It does suggest the 2008 second-half cash burn remains quite severe," Citigroup Inc. analyst Itay Michaeli said in a note to clients Monday. "We do not view the move as a sign of imminent financial distress." Michaeli, based in New York, rates the company's shares "hold."

GM may need to raise as much as $8 billion to help finance monthly operating expenses of $11 billion to $14 billion, Goldman, Sachs & Co. analyst Patrick Archambault said in a note. Detroit Free Press

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