The US Treasury said that it will have to sell the rest of GM shares for $95.51 per share to break even on the automaker’s bailout.
This would bring the price three times higher than the current price for GM’s shares, even if the share price has increased 25% so far this year. Back in 2009 the government offered GM a $49.5 billion bailout to help the automaker survive bankruptcy and since then the company has raised $17.2 billion in profits. After the bailout, the government owned 61% of GM’s stock, which was reduced to 33% during the November 2010 IPO.
“There’s no question that Treasury, the taxpayers, are going to lose money on the GM investment,” Special Inspector General Christy Romero, author of the July quarterly report to Congress, said in an interview.
The US Treasury has continued to sell GM shares, with the target of exiting the automaker by April 2014. On June 6th the government still owned 189 million shares, which would be almost 14% of the company. Taxpayers still have to get back $18.1 billion from the $49.5 billion bailout, but if the shares will be sold at the current price of $36.61, the sum will get to $6.9 billion. This means taxpayer will lose $11.2 billion on the bailout.
“We really want to see what’s the plan here. How are taxpayers going to recoup our money? Are we taking a loss?” said Special Inspector General Christy Romero.