GM Stock Needs to Hit $95 for Government to Break Even

#GM

According to a new report by a government watchdog, GM stock needs to reach $95.51 per share in order for the federal government to break even on the controversial TARP bailout of the automaker.

"There's no question that Treasury, the taxpayers, are going to lose money on the GM investment," the author of the Congressional report, Special Inspector General Christy Romero, told the Detroit News.

The government gave GM $49.5 billion in order to help it through bankruptcy and restructure back in 2008 and 2009, which resulted in the federal government owning as much as 61-percent of the automaker.

Since then, the government has been gradually selling off its stock in GM, with its June sale of 30 million shares resulting in the taxpayers now owning about 14 percent of the company. With GM stock trading at $37.29 as of this writing (and trending pretty consistently since the initial offering) the government selling stock in the long run makes it harder for taxpayers to recoup the costs of the bailout. If the federal government sells its remaining shares in GM at current stock prices, it would get just over $7.0 billion, putting the taxpayer in the hole by about $11.0 billion.

Many current and former GM execs can't wait for the government to sell all of its stock in the company, due to the negative attention it brings them. “The Treasury Department should sell every last share that it owns of General Motors – as quickly as possible,” former CEO Ed Whitacre wrote in an opinion piece for The Wall Street Journal in September of last year. “It’s time for Treasury to step out of the way so that GM can fully focus on what it does best.”

Source: The Detroit News

Dave_in_Rio_Rancho
Someone thinks the US Federal Government could/should make a profit on anything - how quaint:)

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