GM said it might buy back more shares from the US Treasury or offer a dividend to increase its shareholder value.
The US automaker continues to focus on upgrading its investment-grade status, therefore the company plans to buy more shares of stock or offer a dividend. GM CEO Dan Akerson said “we’ll have to wait and see” if the US Treasury will manage to exit the company this year istead of the previous target of March 2014. He said that the Treasury’s plan to sell 30 million shares is ‘a strong step in that direction.’
In December the US Treasury had 500.1 million GM shares, and the automaker revealed that on June 5th the shares dropped to 219.2 million. Earlier this week the government said it agreed to sell 30 million shares for $1.03 billion, cutting the stake to 13.8% from the initial 60.8% it owned in 2009, part of the $49.5 billion GM bailout.
GM tries to find solutions to return capital to shareholders, either by repurchasing shares or by issuing a dividend. Akerson said that currently the automaker is using the cash to make investments in new plants and products, which will help optimize profitability.
“First and foremost, we must invest in this company so we don’t lose the competitive edge that we have today,” Akerson said.
Source: The Detroit News