Saved by Zero?

It is only a symbolic act, but it may come to represent the moment when either a bankruptcy or a federal rescue was inevitable: General Motors has been estimated to be worth nothing.

An analyst with Deutsche Bank, Rod Lache, told clients today that the automaker is certain to collapse without government assistance. He set a stock price target of zero, down from $4.

"Without government assistance, we believe that G,M.'s collapse would be inevitable, and that it would precipitate systemic risk that would be difficult to overcome for automakers, suppliers, retailers, and sectors of the U.S. economy," Lache said in a research note.

"As part of G.M.'s restructuring, we are also convinced that a large number of stakeholders who are senior to G.M.'s equity will have to settle for pennies on the dollar."

Shares of G.M. are down more than 22 percent this morning, to $3.39 on the report.

The analysts' note and the market reaction build the case for a Chapter 11 bankruptcy as detailed by Paul Ingrassia in Conde´ Nast Portfolio.

The main arguments against bankruptcy, is that it would wipe out shareholders and destroy consumer's confidence in the product. But hasn't that already happened?

Ingrassia says: "The main advantage of Chapter 11 is that it would give G.M. a chance to wipe the slate clean and do what pretty much everyone agrees it needs to--reduce its number of brands and cut costs. Right now, it can't take those steps because the opposing parties (car dealers, labor unions, and suppliers) are strong enough to push back."

A stock target can't by itself push a company into bankruptcy. But consider some other companies that were members of the zero-stock-price club:

IndyMac. Friedman, Billings, Ramsey & Co. cuts price target to zero from $1 on July 8. Lender is seized by regulators on July 11.

Silverjet. British stockbroker Daniel Stewart starts coverage of the business-class-only airline with a 'sell' rating and zero pence target. In April, Silverjet shuts down.

American Home Mortgage. Keefe, Bruyette & Woods slashes target to zero from $6 on August 1, 2007. The next day, American Home tells employees it will close.