Government starts to sell remaining stake in GM
DETROIT (AP) — The U.S. government has started selling its remaining General Motors stock as it moves to end four years of partial ownership of the Detroit automaker.
The Treasury Department said in its January report to Congress that it sold $156.4 million worth of GM common stock last month.
The report, dated Feb. 11, says the government has recovered about $29 billion of its $49.5 billion bailout of GM. That means it's just over $20 billion in the hole on the bailout.
Details on the average share price will be revealed later, Treasury says in the report.
GM's stock ranged from $27.61 to $30.68 in January. At the midpoint of that range, $29.15, the government would have sold about 5.4 million shares.
The government owned 300.1 million GM shares, or 19 percent of the company, at the start of the year. Treasury has said it will sell the rest by early in 2014, depending on market conditions. Treasury would not reveal specific details of the sales plan or provide further information on timing.
Breaking even would require selling the remaining 300 million shares for an average of about $70 each — more than double the current trading price.
GM shares were down 48 cents, or 1.8 percent, to $26.63 in midday trading Monday.
In January, Treasury announced a plan to sell the shares and said that it hired JPMorgan Securities and Citigroup Global Markets to conduct the sale. The banks will get one cent for every share they sell, for a fee of up to $3 million.
When the government finally sells all of its shares, it will end a sad chapter in GM's history. The company nearly ran out of cash in 2008 and needed government money to survive a trip through bankruptcy reorganization. Since then, GM has posted 12 straight quarters of profits. Last year, the company bought 200 million of its shares from the government for $5.5 billion.
The bailout has rankled many taxpayers who thought the government shouldn't have interfered with the company's business. Some still call GM "Government Motors."
GM shares sold for $33 each when they began publicly trading again in November, 2010. The shares rose shortly after the sale but fell dramatically early last year as the U.S. economy slowed and Europe headed toward recession. A strengthening U.S. auto sales recovery and the stock buyback pushed the price back above $30 toward the end of the year.
The Treasury Department said in its January report to Congress that it sold $156.4 million worth of GM common stock last month.
The report, dated Feb. 11, says the government has recovered about $29 billion of its $49.5 billion bailout of GM. That means it's just over $20 billion in the hole on the bailout.
Details on the average share price will be revealed later, Treasury says in the report.
GM's stock ranged from $27.61 to $30.68 in January. At the midpoint of that range, $29.15, the government would have sold about 5.4 million shares.
The government owned 300.1 million GM shares, or 19 percent of the company, at the start of the year. Treasury has said it will sell the rest by early in 2014, depending on market conditions. Treasury would not reveal specific details of the sales plan or provide further information on timing.
Breaking even would require selling the remaining 300 million shares for an average of about $70 each — more than double the current trading price.
GM shares were down 48 cents, or 1.8 percent, to $26.63 in midday trading Monday.
In January, Treasury announced a plan to sell the shares and said that it hired JPMorgan Securities and Citigroup Global Markets to conduct the sale. The banks will get one cent for every share they sell, for a fee of up to $3 million.
When the government finally sells all of its shares, it will end a sad chapter in GM's history. The company nearly ran out of cash in 2008 and needed government money to survive a trip through bankruptcy reorganization. Since then, GM has posted 12 straight quarters of profits. Last year, the company bought 200 million of its shares from the government for $5.5 billion.
The bailout has rankled many taxpayers who thought the government shouldn't have interfered with the company's business. Some still call GM "Government Motors."
GM shares sold for $33 each when they began publicly trading again in November, 2010. The shares rose shortly after the sale but fell dramatically early last year as the U.S. economy slowed and Europe headed toward recession. A strengthening U.S. auto sales recovery and the stock buyback pushed the price back above $30 toward the end of the year.
So the ownership of Cadillac was a 20 billion dollar flop and the most powerful black man in America still lives in government housing. Keep the change.Â
@Janusfree I didn't know rush was black??
Our government shouldn't have wasted our tax dollars on them in the first place. Â They were failing because they build a crappy automobile. Â That hasn't changed, but all government agencies are purchasing GM or Chrysler products in order to guarantee they repay the loan. Â Both companies should have been dissolved. Â The workers could have gotten jobs at the other auto companies, the ones that didn't need bail outs. Â But. it has become common practice that the obama regime likes to help out losers and our country is paying dearly for it.
@Shadow You and last boyscout need to get together and study. Bush started the GM bailout.Â
@I812Great logic guy. So if Bush jumped off a cliff, Obama will naturally follow? This is your idea of a great president? Someone that follows Bush's lead?
@last boyscout @I812 Kind of like your great logic of blaming Obama for anything and everything?
The entire Washington D.C. culture is toxic and the only way to fix it is to vote everybody out and start over.Â
So GM is making profits again and pretty big profits. Instead of honoring those that kept them going they have now stiffed their bondholders in bankruptcy, and the American taxpayer after the bankruptcy. It is very unlikely that I would ever puchase another GM product as long as I live although I have paid for a few through the bailout.
Stock up on canned goods and weapons. This won't end well!
@Oregon7812 Invest in GM, buy a Chinese Jeep.
and to show appreciation for the bail-out, GM has moved major operations to China...........
Once they are done selling off stock they need to send GM a bill for the difference between price paid and price received. I'll never buy another GM product until they pay their bill.
@2012 Hope and Change Yeah, about that, sending GM a bill didn't work out so well for the previous bondholders either as I recall.
Yep, and maybe the government can give back the profit it made on other bailouts. Seems fair and all.
@2012 Hope and Change I'll never buy one.....period!!
The squeaky (Union) wheel always gets the grease (taxpayers cash). Funny how it's the Big Union companies getting the cash. Liberal politicians and unions are like Obama and lies. They just go together.
@last boyscout Maybe your revisionist history works for you but Bush provided the initial bailout of GM.
@I812 @last boyscout LMAO.....I just knew it had to be GB's fault...!!  Gosh knows OB, the master of finance, wouldn't have made such a horrible mistake....
@'CouvGuy @I812 @last boyscout  W  did and it was WRONG  then too. I would also add W did NOT take over the company either..... all he did was throw some money at GMÂ
@last boyscout Just like all those unions on Wall Street...
@last boyscout  Democrats and unions are what I call the perfect circle jerk of politics....
@kramr @last boyscout just like Republicans and corporate execs?
@Ramsesthegreat @kramr @last boyscout
Like Jack Lew of Citibank?
Sure glad our do-gooder government decide to hitch their wagon to GM's star. What a waste !!!
@TimBurr yes how dare they save in excess of one million direct and indirect jobs through the use of the bailout. The thing about the auto industry is that they utilize so many different parts from so many different manufacturers that had GM folded you would have seen a massive ripple effect that would have potentially suddered hundreds of other businesses as well.
@Ramsesthegreat @TimBurr You mean bailout of the unions.....
@Ramsesthegreat @TimBurr Just like the ripple effect that's on it's way.  All they did was postpone the big crash.
@Ramsesthegreat @TimBurr   """"yes how dare they save in excess of one million direct and indirect jobs through the use of the bailout""""
GM could have gone thru  A bailout on their own just like many Airlines have successfully done.  As TB mentioned,  the  most significant difference that the feds brought to the table was they  stole  the bond holder equity  and essentially gave it to the UAW.Â
You've been swallowing far too many of the lefts lies that GM would have just shriveled up and went away. They would NOT have.Â
@Ramsesthegreat @TimBurr  A  bankruptcy..... not bailout
@Ramsesthegreat@TimBurrThe bailout was primarily used to bailout the UAW union.
http://www.nationalreview.com/corner/302888/auto-bailout-or-uaw-bailout-james-sherk"taxpayers lost money only because the administration paid some $26 billion to subsidize the pay and benefit of UAW members."
At least they made money on the bank bailouts. They're stiull in the hole on this one !
@Rob C 503 even the best investors lose money on some investments. Unless of course you're Bernie Madoff.
@Ramsesthegreat @Rob C 503  Its NOT the feds job to be investing in car companies.Â
@kramr @Ramsesthegreat @Rob C 503 Yea they should Only give it to banks that foward the money to the Caman Islands.
Right??