The US Treasury Department has announced that they are planning to sell another batch of the GM stock it originally acquired during the 2009 government bailout. Currently the Treasury has 241.7 million shares of GM stock which amounts to about 18% of the total common stock issued for the company.
This is good news for the automaker who has faced backlash over its government ownership including the very unwelcome nickname “Government Motors.” The 2009 bailout originally set up the Treasury with a majority 60.8% ownership stake so they’ve already pared that down significantly to the 18% they own today.
Part of that decreased ownership interest came as a result of the IPO which GM issued back in November of 2010. That IPO brought the Treasury’s ownership stake down to 32%. In December, the Treasury said that it planned to completely sell off its remaining investment in GM within the next 12 to 15 months.
No exact timetable was given as they plan to stagger the offerings depending on market conditions in order to get the best price possible from the sale. At the same time, GM also repurchased 200 million shares of its own stock from the Treasury for about $5.5 billion.
Since the goal of the original stock purchase was never to turn a profit, but to save the ailing US auto industry and protect jobs, there’s little chance that taxpayers will see a full return on their investment. The government had recovered $30.4 billion by the end of March, but that leaves a ways to go toward the original $49.5 billion investment.
Just last week GM came within 56 cents of that November 2010 IPO price of $33 per share. This was all thanks to better first quarter earnings that were better than expected. News of the upcoming offerings by the Treasury didn’t much affect the price of GM stock which saw just a 27 cent fall to $31.83 at Monday’s close.
Nicole Wakelin fell in love with cars as a teenager when she got to go for a ride in a Ferrari. It was red and it was fast and that was all that mattered. Game over. She considers things a bit more carefully now, but still has a weakness for fast, beautiful cars. Nicole also writes for NerdApproved and GeekMom.
