Last month the US Treasury sold $156.4 million in GM stock, with shares priced at about $28 to $30.
After GM bought 200 million shares for $27.50 each and a total of $5.5 billion, the US Treasury said that the rest of 300.1 million shares will be sold in the following 15 months. The Treasury’s strategy is to sell the remaining shares regularly throughout the year in order to avoid disrupting the stock price.
Until now, the US government has recovered about $29 billion of its $49.5-billion offered for GM’s bailout in 2009 to avoid bankruptcy. Earlier this month the US Treasury announced that the estimated losses for the $85 billion auto bailout offered to GM, Chrysler and their financing arms dropped 16% or $4 billion mainly because GM’s stock price began to rebound.
The Obama administration recently announced that the estimated auto losses fell to $20.3 billion from the previous forecast of $24.3 billion. The Treasury now needs to sell the rest of the stake with the average price of $70 a share to break even.
Earlier this month, the investment firm Berkshire Hathaway, which belongs to Warren Buffett, purchased 10 million GM shares, increasing its total number of shares to 25 million. The total worth of this stake is $694 million, which means Berkshire became one of the largest single shareholders of the US automaker.