U.S. Needs to Sell GM Stake at $133.78 a Share to Break Even

GMThe U.S. government would have to sell all its shares in General Motors at an average price of $133.78 a share in order to break even on its stake in the company.

That's $39.15 higher than the peak price of the old GM's shares, in 2000, during the peak of the boom in pick up trucks, The Wall Street Journal said.

Neil Barofsky, special inspector general for the $700 billion spent on bailouts, named the $133.78 price in a letter to Republican Sen. Charles Grassley. The senator had asked Barofsky for an analysis on the forthcoming GM IPO and the government's chances of getting its money back.

The depressed auto market could make it difficult for the government to recoup its investment.

"If GM has good products in the pipeline and the market takes off, there would be a better chance," Stephen Spivey of Frost & Sullivan's Automotive & Transportation practice told The Wall Street Journal. "If you're betting today, the chances aren't great."

GM received $49.5 billion of taxpayer money to help it reorganize. The company has paid back $6.7 billion in cash, $2.1 billion was converted to preferred shares and $1 billion went to wind down the old company. The remaining $39.7 billion was converted into a 61% into the automaker.

These figures don't include interest and dividends.

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charles48135

Quick, Less blame the union. Not the CEO or the board member. They had nothing to do with it;-)

September 24 2010 at 5:55 AM Report abuse -1 rate up rate down Reply
Mark

What is the current price of GM shares? Should taxpayers be worried? Stupid question....................

September 23 2010 at 3:31 PM Report abuse +1 rate up rate down Reply
kellyplating

Wake the Hell Up - This is nothing but pension obligations being transferred to people who pay taxes.

September 23 2010 at 12:38 PM Report abuse +2 rate up rate down Reply
cdegolf2

The bailout of GM, when compared to the enormously BIG BANK BAILOUT PALES IN COMPARSION. How, in good conscience, can the banking industry grant multi-million dollar BONUSES of TAXPAYER MONEY to their managers when they perhaps OWE their very existance to the ANERICAN TAXPAYER. Perhaps their is more GREED than HONOR in our banking system.

September 23 2010 at 11:43 AM Report abuse +3 rate up rate down Reply
kmwilly

How is it that GM has been able to contibute millions to the Democrap Party this season?

September 23 2010 at 10:39 AM Report abuse +5 rate up rate down Reply
1 reply to kmwilly's comment
Mark

Magic...............

September 23 2010 at 3:32 PM Report abuse rate up rate down Reply
heritagemusicrep

Don't forget about the last line:"These figures don't include interest and dividends". Which means that if those figures were included the government would recover all its money in 15-20 years without having to sell any shares. I love it when they leave out figures for a more sensational story.

September 23 2010 at 10:32 AM Report abuse rate up rate down Reply
sfoxtours

PS if the Goverment gave me 1 million dollars I could create 2 well paying jobs for 16 years guarenteed.

September 23 2010 at 10:31 AM Report abuse +4 rate up rate down Reply
sfoxtours

Gm should have crashed and burned. A new and better company would have risen from the ashes. One without the threat of a union. The unions and management are both to blame for the situation. As long as the UAW is involved at GM you will see the money continually go down the drain. The system is broke and not just at GM. Thank GOD there is hope on the horizon The Taxed Enough Already Party. Long live the Tea Party.

September 23 2010 at 10:29 AM Report abuse +7 rate up rate down Reply
themanindbox

Have China or Mexico bail them out this time. After all that is where they plan on opening all of there new plants, and where they plan on hiring new workers...

September 23 2010 at 10:23 AM Report abuse +4 rate up rate down Reply
MSmailbox

I know that it sounds preposterous, but we will recover all of the money (and a whole lot more). People seem to think that a US Dollar means the same purchasing power, as it did back then. It doesn't. If you take into account the current number of dollars in circulation, coupled with the accelleration of the printing of new dollars, GM could easily be selling for well over $200 a share, within months. I will invest in "the company." I used to work for them!

September 23 2010 at 10:19 AM Report abuse -4 rate up rate down Reply
2 replies to MSmailbox's comment
themanindbox

For buick? Then outsourced to Germany or China? Why used to?

September 23 2010 at 10:24 AM Report abuse -2 rate up rate down Reply
MSmailbox

GM/NAO/GMAD/BOC/FAD/EDS/me. The Federal Republic of Germany, or Deutschland? The People's Republic of China, or Taiwan? Used to, because I lost my mind!

September 23 2010 at 10:42 AM Report abuse rate up rate down Reply