• Feb 25, 2011
According to The Detroit News, the United States Treasury Department is planning on quickly eliminating its shares of General Motors stock rather than trying to maximize the government's return on its investment. The news comes from Austan Goolsbee, chairman of the Council of Economic Advisors, who said that the government is interested in quickly shedding its 33 percent stake in the automaker due to the fact that it never wanted to be a shareholder in the automaker to begin with. The Detroit News reports that if the Treasury Department decided to sell its stake in GM at its current trading price, the government would lose something on the order of $10 billion.
That's out of the $49.5 billion bailout that GM received from the government.

GM shares are currently trading at their lowest levels since the company went public, thanks largely to an overall market dip. The drop came even with GM reporting its first profit since 2004.

The Detroit News reports that so far, the federal government has reclaimed $23.1 billion of its investment in GM, and that in order to recuperate the $26.4 billion, GM stock would need to trade at $53 per share. The company is trading at $33.02 at the time of this writing.

[Source: The Detroit News]


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  • 22 Comments
      • 3 Years Ago
      DOES THIS GOVERNMENT KNOW WE HAVE A 9% UNEMPLOYMENT RATE AND FAMILIES OUT THERE ARE STRUGGLING TO SURVIVE. AND THEY ARE PREPARED TO LOSE 10 BILLION DOLLARS . WHAT A JOKE . THE BIG CORPS ALWAYS WIN THE MAN ON THE STREET ALWAYS LOSE .
        • 3 Years Ago
        It dosen't have to be that way. TERM LIMITS NOW
      • 3 Years Ago
      Buy High, Sell Low.... sound investment advice right there.
      What is another 10B anyway?
      • 3 Years Ago
      Just let GM sink and die already.
      • 3 Years Ago
      I think the plan was to wait for GMs products to start rolling out and profit (and more importantly perception) to take off. GM unfortunately made a HUGE strategic error by delaying a lot of its products for over a year, focussing too quickly on getting their stock out and dropping the gov't involvement.

      This was the exact opposite route taken by Chrysler which is working hard to get their products up to scratch and leading the stock offering with product in the showroom; and a second wave on the way (people will know what it looks like).

      GM got the $$ now, but they could have gotten a lot more if they were more product savy in the management side. GM has terrific products all planned out and ready to go -- but they are 18 months away! The Dealers need ALL those products TODAY. Crazy lack of front line understanding. I can't imagine of demoralizing it has to be to be engineering incredible products, only to have your management delay it so that can make money in the short term.

      GM will get their $50 stock, but it will be delayed by 18 to 24 months. The Gov't can't wait it out with elections and politics going on.
      • 3 Years Ago
      The Treasury is broke and is having a fire sale. They even had to delay IRS refund checks.
        • 3 Years Ago
        Got my refund a week ago.
        • 3 Years Ago
        Broke,
        they sure are handing out a lot of big bonuses to everyone that works at GM and Chrysler.
      • 3 Years Ago
      Maybe Obama didn't listen to his friend Buffet. It's buy low sell high not the other way around.
      • 3 Years Ago
      Hey government, it is buy LOW, sell HIGH.

      • 3 Years Ago
      This is complete B S, you know for a fact insiders knew this was coming, GM just posted its first profit in 6 years and the price still tanked over the last week, that was insiders dumping before this news was released so the little guy could get left holding the bag once again. I just sold my call options on GM that I bought this morning on the open market at a 4% loss and I will never buy another GM car or invest in GM stock as long as I live, this is the final straw.

      http://stockcharts.com/h-sc/ui?s=GM&p=60&b=5&g=0&id=p17014228612


        • 3 Years Ago
        Hey big time operator, if you choose to screw around in the options market, by all means, be my guest, but don't bleed all over this thread when you take a hosing. You're not an investor. You're just a speculator trying to make big bucks without putting any skin in the game. And you made the wrong guess. My heart bleeds for you.
        • 3 Years Ago
        @Nick

        "wah wah wah I won't buy a GM car"

        lol
        • 3 Years Ago
        Hey genius...Options trading is a perfectly legit way to play the market whether you agree with it or not... DISSEMINATING INSIDER INFORMATION IN A NON PUBLIC FORUM IS COMPLETELY ILLEGAL AND THIS IDIOT DESERVES TO BE IN JAIL! IF A COMPANY EXECUTIVE DID WHAT HE JUST DID THAT IS WHERE HE WOULD BE!

        Jerk-off.
      • 3 Years Ago
      Those $4300 bonus's given to the employees doesnt seem like such a wise idea now does it.....
      • 3 Years Ago
      Cut our losses and NEVER do it again. If gas hits $5.00 a gallon, kiss GM goodbye.
      • 3 Years Ago
      Though it would be nice to get rid of the "Government Motors" stigma, my issue is shouldn't we at least try to get some "return on investment"?

      At this rate, if they dump the remaining 33 percent on the market, supply-and-demand suggests that would cause the stock price to nose-dive even further, increasing the taxpayers' loss.
        • 3 Years Ago
        What return of investment! "New" GM shredded $30BN debt from all sorts of companies during the "restructuring" and now another 15$BN in unpaid taxes which the same Treasury will not get ... So easy to show profit for the first time after 2004 when someone just gave you (allow you to write off) $45BN debt ...

        Competition with the other 2 or Japanese companies? Not really!
      • 3 Years Ago
      ara ara, i don't know why but i fell that another crisis is coming(cof cof north africa cof cof, petroil cof cof)
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