US to sell GM stake at $11 billion loss

[BJJ-Blue]

"The government plans to sell most of its remaining stake in General Motors in the coming months and lose $11 billion in the process, The Wall Street Journal reports.

With taxpayer money, the government rescued General Motors for $50 billion in 2009

To get that money back, the U.S. Treasury will need to sell its remaining stake of around 500 million shares at $53 apiece.

GM is currently trading around $30, even dipping below that figure, on the New York Stock Exchange, below its $33-a-share November initial public offering.

"Planning for the sale of our remaining GM stock is still at an early stage, and the IPO lock-up does not expire until late May," says a Treasury spokesperson, according to the Journal.

"At that point, we will consider all of our options, based on our twin goals of protecting taxpayers' interests and exiting as soon as practicable."

Rising fuel prices, production snags and management turnovers have hurt the company's stock price.

GM's $23.1 billion IPO in November reduced the U.S. government's stake in the automaker to 26.5 percent from 61 percent.

As a condition of the IPO, the Treasury isn't able to sell additional holdings before May 22.

The company, meanwhile, raised discounts to $400 per vehicle in January and February with the aim of boosting sales, which didn't help stock prices at all.

Company CEO Dan Akerson says he supports the move. "I feel pretty good about that. I think we're in pretty good shape," Akerson says, according to the Associated Press."

Source:
http://www.moneynews.com/StreetTalk/...4/21/id/393608


"Today one of the toughest tales of the recession took another big step towards becoming a sucess story. General Motors re-launced itself as a public company, cutting the Government's stake in the country by nearly half. Whats more, American taxpayers are now positioned to recover more than my Administration invested in GM." - Barack Obama, November 2010

http://www.youtube.com/watch?v=iEBVk...layer_embedded

So he got yet another one dead wrong, and our kids are stuck with the bill because of it.

[Drake]

Serves him right for trying to do the same thing the last President did.

[MasterKiller]

Serves him right for trying to do the same thing the last President did.

Uh...1bad will correct me if I'm wrong, but I believe GM got it's money in the TARP, signed into law by U.S. President George W. Bush on October 3, 2008.

[BJJ-Blue]

Uh...1bad will correct me if I'm wrong, but I believe GM got it's money in the TARP, signed into law by U.S. President George W. Bush on October 3, 2008.

In December of 2008 the Bush Administration did provide GM with a "bridge loan". This gave GM and Chrysler $13.4 billion. President-elect Obama embraced the plan.

GM's Chapter 11 filing became effective June 8, 2009. It was the Obama Administration who bought the GM stock/assets and said that the US taxpayer would "recover more than my Administration invested in GM", which turned out to be VERY wrong ($11 billion wrong to be precise).

http://www.nytimes.com/2008/12/20/bu...Ps9S2gjVIk+HLg