Nice deal for GM.
In order for taxpayers to break even on the GM bailout, the share price needs to hit $53/share before sale. The government is exiting the company partially in January, selling 200 million taxpayer funded shares back to GM at $27.50/share.
In the attached article USA Today highlights that this would be a 7.9% premium from the current share price of $25.49. That taxpayers are taking a nearly 50% bath on this deal is also mentioned.
The Treasury says that it will exit its complete position over the next year or so. For all the talk of the “success” of the auto bailout—it seems to me that losing half of our money does not constitute success.
There is always the chance that GM shares will rise and we’ll be able to cut our losses at least a bit as shares are sold back over the next year. But I’d say there’s at least an even chance that the taxpayer will lose even more.