Back in 2009, the U.S. Treasury received General Motors stock after its bailout of the automaker and is now expected to loose $9.7 billion on selling the stock. According to the special inspector general for the Troubled Asset Relief Program, taxpayers still owe about $14 billion from the $49.5 billion in loans that is provided to GM.
The Treasury had started with $912 million shares in General Motors, which is about 61 percent stake in the company, while GM went bankrupt in 2009. On September 26, $811 million shares were sold, and GM was trading $35.69 per share at midday as of today.
While there’s a slim chance that taxpayers will break even on the remaining stock, GM’s stock price would have to increase to more than $140. An email from a GM spokeswoman stated that, “General Motors is rapidly becoming the company that everyone hoped when the government rescued the auto industry.” She also adds that GM is, “producing cars that win in the marketplace under sound, smart management.”
The federal government is hoping to stay on track to relinquish the GM holdings within a few months. As of last month, the Treasury sold $570 million in GM stocks as a plan to unload the last of its shares by the end of March.
- U.S. Treasury Reports Nearly $10 Billion Loss on GM Shares (dailyfinance.com)
- U.S. Treasury Reports Nearly $10 Billion Loss on GM Shares (fool.com)
- U.S. reports $9.7 billion loss on General Motors bailout (uk.reuters.com)
- Taxpayers Still on the Hook for General Motors’ Bailout (dailyfinance.com)
- Feds report $9.7B loss on GM shares (globalclarity.wordpress.com)