Hayman Capital Takes Stake in General Motors as Treasury Exit Nears
Hedge fund Hayman Capital has acquired a stake in General Motors, betting on a sharp rise in the automaker’s shares as the US government prepares to sell its remaining holding.
Hayman Capital, the hedge fund led by Kyle Bass, has acquired a stake in General Motors as the US Treasury moves to offload its remaining shares in the carmaker. The investment comes as GM’s stock approaches its highest level since the company’s 2010 IPO, with Hayman expressing confidence that the shares could climb more than 40 percent in the coming year.
According to sources familiar with the investment, Hayman Capital believes GM’s equity offers one of the best risk-reward profiles among large-cap stocks. The fund’s optimism is tied to the US government’s plan to sell its remaining 2 percent stake by the end of 2013. This anticipated exit is seen as a catalyst that could unlock further value for shareholders, with expectations that GM will have greater freedom to return capital through dividends and share buybacks once government oversight ends.
Market Reaction and Investor Sentiment
GM shares rose by 1.2 percent to $38.58 on the New York Stock Exchange following the news of Hayman’s investment. Other hedge funds are also reported to be watching the automaker closely, with several potential investors said to be considering positions as the Treasury’s exit approaches. The prospect of GM reinstating a common stock dividend and increasing buybacks has added to the positive sentiment.
Context: Government Exit and Future Prospects
The US government’s involvement in GM dates back to the 2009 bailout during the financial crisis, after which Treasury held a substantial equity stake. By late 2013, the holding had been reduced to around 2 percent. The planned sale of these final shares is expected to remove a technical overhang on the stock and allow GM to operate with fewer restrictions on capital allocation. Market participants have pointed to this as a reason for renewed interest from institutional investors.
Hayman Capital’s move into GM follows a broader trend of hedge funds seeking value in the automotive sector as legacy manufacturers recover from post-crisis lows. The fund’s presentation, published on HVST.com, highlighted Detroit’s resurgence and GM’s potential to lead the sector’s equity performance in the near term.
As the Treasury’s exit nears completion, attention will turn to GM’s next steps on shareholder returns and operational strategy. For more on GM’s recent stock performance, see GM stock reaches post-IPO high as US Treasury accelerates exit.
