Will US take a steep loss on GM?
The U.S. Treasury owns 500 million shares of General Motors, and is tired of waiting for the share price to rise.
The U.S. Treasury still owns about 500 million shares after the $50 billion rescue of the company in 2009. It would need to sell those shares at $53 apiece just to break even on its investment.
But GM's share price is nowhere near that amount. The stock hit a new low this week and is at about $30 today, down 19% year-to-date. The way fuel prices are moving, the chance of that stock hitting the $53 mark anytime soon are nil.
The government is likely just going to sell the stock at a loss to taxpayers, The Wall Street Journal reports. At GM's current price, taxpayers would lose at least $11 billion if the government sold its entire stake. But hey, what's another $11 billion to a government bleeding so much red it could pass for an extra on "Saw 3D"?
The Journal says that the Obama administration wants to sever its last ties to GM before the stock sale turns into an exclamation mark in next year's presidential election. And GM, for its part, would love to say goodbye to the government because then all restrictions on executive pay would lift.
GM raised $23.1 billion in its initial public offering last November, and the government was able to cut its stake to 26.5% from 61%. But the IPO terms say the Treasury can't sell any more stock until May 22, the Journal reports.
People thought the stock would be just fine this year. But that was before gas prices started climbing and the earthquake in Japan disrupted supplies across the industry. And GM's chief financial officer bailed unexpectedly.
Treasury Secretary Timothy Geithner hasn't made the final decision whether to sell the shares, the Journal reports.
Make GM buy the stock at what Gov paid for it. Plus 5%. Let GM take the loss.
Better yet, let the union take the loss. WHY should taxpayer have to take the
Maybe they should start by selling product instead of selling price. Jan. and Feb. were huge months for GM because all of the business was pulled ahead from MArch and April.
GM residual values are headed down the same road as before. just keep building cars and slamming the dealers. Good rebates ahead = bad resale value.
This is exactly why we do not have a real president. This guy is the biggest joke since Jimmy Carter. Everything he touches turns to ****..
It is amazing that anyone with a half a brain could support this idiot.
I know there's got to be a legal term for this but if this isn't one of the most scandalous actions a government has ever taken against it's own people I don't know what is. To make a statement like this is outrageous and a direct insult to the people of the United States by it's own President for the sake of trying to buy votes off of --Oh , by that time the people will forget we screwed them out of all their money to play our own Union bailout games. It's time this crap ended and the people responsible held accountable for their actions.
WAKE UP AMERICA, How blatant can you get.
the real sadness is that our El Presidente would like to unload GM so it isn't a key negative point in next years election. Isn't that great!
Now if the man just said "i did what i thought was right, i tried, i saved an untold number of jobs, but it just isn't working". Now i could support that man, i could understand .
Did we take the high road, noooooooooo we make excuses and try to get out while the getting is good all in the name of next years elections. I don't respect anything in that at all.
On the otherside GM would like to be rid of the Government so they can get rid of the restrictions on executive pay. Excuse me while i puke! But i can't say i'm surprised about GM they are one of our "prize" industries.
I had truly hoped we found someone with character to be our president but once again i am apparently mistaken. In politics it is all about votes in iindustry it is money. Where do they differ? They don't !!
Now isn't this a proud moment for America :(
I'm moving to Ecuador folks and won't miss this mess we call a country for a moment!
Obama scr#wing the American Tax payer & trying to dump evidence before it's time to count votes? No Way! You mean a con artist is still a con artist? Imagine that!? I'm sure if he creates a big enough welfare pool, he'll get his votes.
Oh & look up the term he is using recently in his speeches: Last few weeks Obama has been saying-social compact in his speeches-I urge you to research you-This was used by Thomas Hobbs at the time of our foundering fathers who would not accept it. In short SOCIAL COMPACT MEANS
People live under a KING and shall have no rights except that which the KING appoints. Rome gave it a short (did not work) many 3rd world nations use it today (how is that working out)
Do you want Social Compact so the goverment can rule your life even more or do you want freedom??
CAN YOU AFFORD FOUR MORE YEARS?
Hang on to it and sell it for a profit next yearWhat makes you think GM stock will rise over the next year? Well at least the next time GM fails, our gov't should have the sense to look away and let it fold. The Chinese could've come in during a non-Obamanation controlled BK and taken over this business. And just how long do you think they'd tolerate the UAW nonsense?
Most of us knew at the time of the GM bailout that the taxpayer would get screwed. Obama wants this stock dumped to keep it in the background for his re-election campaign. He made a deal with the unions and it is now biting him in the @ss because GM has certainly not changed the way they do anything....the unions still have control of production costs. The $40K Chevy volt they are touting is not the way to save America because the middle class cannot afford it. The money to bailout GM was like most of the bailouts.....supporting special interests in this country and not the entire nation as a whole. The People who have quit buying GM are not going back to that brand and part of that has to do with the way the bond holders were left holding the bag.
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It's been a rough road for the car-rental company. Analysts downgrade the stock after the news.
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