The U.S. Treasury got the short end of the 2009 General Motors Bailout, as the Detroit News is reporting that the federal government has lost $9.7 billion so far after selling some of its remaining shares in GM. With the recent sale of these remaining shares acquired in the $49.5 billion bailout, the federal government’s stake in GM has dropped from 60.8 percent down to around seven percent.
In 2009, the U.S. Treasury received 912 million shares in GM as part of the automaker’s bankruptcy restructuring. After a large IPO that sold off 412 million of these shares in 2010, GM bought back 200 million shares last year for $5.5 billion to help reduce the Treasury’s losses, leaving 300 million shares that the Treasury has now begun selling off, albeit at a lower price than what they need to break even. Because the current share price for GM stocks is far less than the amount that the Treasury paid for each one during the bailout, the government has lost $9.7 billion on reselling those shares. So far, the Treasury has gained back $36 billion of the $49.5 billion GM bailout. The Treasury previously announced that it would get rid of all holdings in GM by March 2014 at the latest.
This $9.7 billion loss so far compares with the $1.3 billion loss from the Chrysler bailout. Chrysler has completely repaid its loans to the government since being purchased by Fiat. As a whole, the Treasury invested approximately $80 in the bailout of GM and Chrysler, and has recovered approximately $53 billion so far.