Short GM

GM reported $38.96 billion third-quarter net less, which is one of the largest quarterly losses for a public U.S. company, according to S & P. The majority of GM's loss stemmed from a $38.6 billion charge related to the write-down of tax credits and doesn't affect its cash position. There also is a $757 million loss on the company's 49% interest in GMAC, which is being dragged down by ResCap, a home-mortgage business.

As reported, GM lost money in North America and European markets. However, the amount of lost decreased a lot,which indicates the Auto giant is making progress. It might be too early to say that the company will get rid of big financial and managerial troubles in years.

For its stock, I shorted it. And made a great profit. However, because this is not the stock which I traced for a long while. I bought back after its price decreased by 3 dollars to $ 31.8.

My concerns about the stock are as follows:
1.how can we estimate the potential decrease if big lost happened?
2.What exactly is write-down of tax credits? Why could it cause such a huge lost?
3.Does GM have to write down all of the amount at one time? What's the purpose?