The Federal government sees $9.7 billion loss on GM shares image

The U.S. Treasury has booked a $9.7 billion loss on its 2009 bailout of General Motors due to the sale of nearly all of its shares it received as part of its $49.5 billion bailout.

In a quarterly report to Congress Tuesday, the Special Inspector General overseeing the $700 billion Troubled Asset Relief Program bailout fund disclosed that the Treasury had realized a significant loss on its sale of most of its 60.8 % stake in GM.

The taxpayers’ ownership stake in the Detroit-based automaker — swapped for more than $40 billion in loans, was initially 60.8 %, but is now down to about 7 %, the Treasury said.

“Because the common stock sales have all taken place below Treasury’s break even price, Treasury has so far booked a loss of $9.7 billion on the sales,” the report said.

Treasury would need to get $147.95 a share on its remaining shares to break even. That’s not going to happen: GM’s stock closed Wednesday at $35.80, up $0.21, or 1%. At current trading prices, the government’s remaining stake is worth about $3.6 billion. At current stock prices, taxpayers would lose about $10 billion on the bailout when all the stock is unloaded.