According to a report to Congress, the U.S. Treasury sold $877 million in General Motors stock in July, the DetroitNews reports. Considering the fact that in July GM stock traded between $34 and $37, the U.S. Government sold between 23 million and 26 million shares of its holdings.
If is to calculate, at this moment the government has about 137 million shares of GM stock remaining (from a total of 500.1 million GM shares in December) and at the current rate, it would take about six to seven months for the government to exit completely from this business. Problem is that the U.S. Government has recovered only $34.6 billion of its $49.5 billion bailout of the automaker.
And if is to take about this report (full report here) even if the share price has risen more than 20 percent this year to $35.98 at the time of writing, GM’s stock should need to rise to over $100 at this moment to spare taxpayers from any loss.
“There’s no question that Treasury, the taxpayers, are going to lose money on the GM investment,” Special Inspector General Christy Romero told the Associated Press.
But the positive aspect is that the exit of Treasury will eliminate the stigma of government ownership – some critics dubbed the company “Government Motors” – that GM executives said has hurt sales.
This summer, GM’s stock finally hit an important psychological milestone – it reached, and then passed, its original IPO price of $33/share.
by Mircea Serafim
) - Tuesday, August 13th, 2013 - filed under General Motors
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