The Treasury plans to sell its remaining stake in General Motors over the next 15 months, allowing the automaker to shed the stigma of being partly owned by the U.S. government.
GM said Wednesday it will spend $5.5 billion to buy back 200 million shares of its stock from the Treasury by the end of this year. The government, in turn, plans to sell its remaining stake of 300 million shares on the open market over the next 12 to 15 months.
GM will pay $27.50 for each share, about an 8 percent premium over Tuesday’s closing price of $25.49. The shares shot up more than 8 percent in premarket trading to $27.57.
The deal almost certainly means that the government will lose billions on a $49.5 billion bailout that saved GM from being auctioned off in pieces during the financial crisis in 2008 and 2009. GM’s buyback will cut the Treasury’s stake to 19 percent from 26.5 percent. For it to break even, Treasury would have to sell the remaining 300 million shares for average of about $70.
More
DelMarVa's Premier Source for News, Opinion, Analysis, and Human Interest Contact Publisher Joe Albero at alberobutzo@wmconnect.com or 410-430-5349
Oh that's ok. How much money did Obama get from their union on this one?
ReplyDeleteDon't buy GM!
ReplyDelete6:21, you already bought it! Your bill was sent to you via the IRS, and you paid it.
ReplyDeleteGM is forever tainted with the bitter taste on government. I will never buy anything else made by them or Chrysler.
ReplyDelete