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General Motors Corp. GM-N stock plunged more than 22 per cent to a 76-year low Tuesday, a day after GM's top executives dumped their shares as the auto maker heads toward a bankruptcy or a restructuring that would all but wipe out existing shareholders.

Six GM executives, led by former GM vice-chairman and product chief Bob Lutz, disclosed Monday that they sold almost $315,000 (U.S.) in stock and liquidated their remaining direct holdings in the auto maker.

The stock sale underscores the pressure on GM with less than three weeks remaining for the embattled auto maker to win deals to slash debt and operating costs with its major union and bondholders to avoid bankruptcy.

GM is headed for either a bankruptcy filing by a government-imposed deadline of June 1, or an out-of-court restructuring that would wipe out current stockholders by flooding the market with new shares to pay off creditors.

The automaker's stock could be worthless in a bankruptcy or worth less than 2 cents a share if it proceeds with plans to issue shares to creditors led by the U.S. Treasury Department, the company has said.

“It's a lose-lose situation as far as we see it, and the shares kind of seem to have been doing a levitating magic trick and just staying up there in the $1.50 to $2.00 range,” Standard & Poor's equity analyst Efraim Levy said.

“Given that there is a two-week deadline coming there should be additional downside pressure,” Levy said.

“At this point the differentiation is that you are rooting for a recovery on GM the company where there is hope, but as far as the GM shareholders, there is no real positive outlook.”

Last week, GM detailed plans to all but wipe out the holdings of remaining shareholders by issuing up to 60 billion new shares in a bid to pay off debt to the U.S. government, bondholders and the United Auto Workers union.

The debt-for-equity exchange would make the U.S. government, which has provided $15.4-billion of loans to keep GM afloat since the start of the year, the majority shareholder of a restructured auto maker.

The plan would also leave GM stockholders with 1 per cent of the equity.

The auto maker, historically was one of the powerhouses in the Dow, the most widely known measurement of U.S. stocks. It has been on the index since 1925 and has stayed despite the dramatic fall in its stock price.

GM's market capitalization as of Tuesday was about $690-million, making it the smallest component in the Dow Jones industrial average by market cap. By contrast, Chevron Corp. CVX-N has a market capitalization of about $136-billion.

GM has lost $88-billion since its turnaround efforts began in 2005 under former CEO Rick Wagoner.

The automaker's shares were down 22 per cent, or 31 cents, at $1.13 on the New York Stock Exchange Tuesday. The stock had fallen to as low as $1.09 earlier, a price not seen since 1933 in the midst of the Great Depression.

GM was first listed on the Dow in 1915. Journal editors removed it – as they did more frequently back then – adding it again in 1925, and it has remained ever since.

Only U.S. conglomerate General Electric Co. GE-N has been in the Dow Jones industrial average longer than GM. GE was an original component in 1896 and like GM was dropped for a period before returning to stay in 1907.

Meanwhile, Ford Motor Co. F-N shares fell Tuesday, a day after disclosing a public offering of 300 million shares of common stock that will help it fund its health care trust for retired auto workers and their families.

Ford, the only major U.S. auto maker that has not accepted government aid, said late Monday it will use the proceeds of the offering for “general corporate purposes” including funding its Voluntary Employee Beneficiary Association, or VEBA, with cash instead of stock.

Dearborn, Mich.-based Ford owes $6.3-billion to its VEBA by the end of this year. In March, United Auto Workers members approved a new contract that, besides freezing wages and cutting benefits, allows Ford to use stock to make payments to the retiree health care trust.

At Ford's closing price of $6.08 per share on Monday, the offering would net the company $1.82-billion. But Ford shares tumbled 53 cents, or 8.7 per cent, to $5.55 in morning trading Tuesday.

The public offering of common stock is a first for the 105-year-old Ford Motor Co., which went public when the Ford Foundation liquidated its shares of the company in 1956. Since then, the number of shares has multiplied with employee stock options, stock splits and preferred stock offerings.