According to a report today by Bloomberg, the U.S. government may be holding back from divesting its shares in General Motors until the automaker’s shares are trading at a better price. With the current stock price sitting below the share price issued during the company’s initial public offering, the Treasury department is likely waiting until it can get equal to or greater money for its stake.
The government currently owns 500 million shares of General Motors public stock, acquired as part of the company’s post-bailout IPO. Bloomberg states that stake is worth about $14.3 billion when priced at yesterday’s closing price of $28.78 per share. Although that price may be up 22 cents from Monday, it is still 13-percent lower than the $33-per-share price GM stock traded during its market debut in August of 2010.
The Treasury department is sitting tight with the shares at the lower price because it sold off 28 percent of GM during the $33 per share IPO. Executives at the automaker have voiced interest in buying back shares from the government, but Bloomberg’s report states that there is worry that selling the shares at a lower price could be viewed as giving GM preferential deal.
GM CEO Dan Akerson said that the company has $30.6 billion in cash and marketable assets at the end of the first quarter, but would not comment on the possibility of a buyback.