US Treasury Loses Additional $3 Billion On GM Bailout

By Blake Z. Rong | August 14, 2012
Due to falling stock prices, the US Treasury will lose $3 billion more than predicted on its wild ride with GM and the bailout. In February, the Treasury predicted that it would be losing $21.7 billion dollars from the bailout. That figure has now jumped up to $25.05 billion, as GM's stock prices fell from February by a rate of 15 percent—and another 8 percent since May. Ultimately, the government spent $50 billion on bailing out GM, but has only recouped $37 billion so far. The U.S. still owns a 26-percent stake in GM, which has proved to be a rocky relationship: from a high of $27.34 in February, it sunk to its lowest stock price in 90 years in April—a dismal $18.80/share. Things have gotten slightly better: on Monday, GM's shares closed at $20.49. The recent ouster of top-level executives certainly haven't inspired confidence. Neither has the slipping market share, which sunk to GM's lowest sometime around GM's worst stock price. Currently, the government owns 500 million shares of GM. If GM's shares double to $53/share, then the government could recoup its $27 billion. But until then, GM will have to work on its new product lineup—the Malibu hasn't been getting stellar feedback, though the new Cadillacs and Buicks have—and sort out its marketing strategy to earn money the good ol' fashioned way: through customer sales. Source: Detroit Free Press
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Thomas J. Thias
Thomas J. Thias

Really, So you said, "Currently, the government owns 500 million shares of GM. If GM’s shares double to $53/share, then the government could recoup its $27 billion."... This is true, but only if the Treasury sell its stake at that price point- Your aticle headline makes a similar statement, a blaring statement, a hysterical statement, it is true only if Treasury decides to sell at this current price point- Great fodder for this political mud fest ongoing till November- Find something more substancial to blog about! Thomas J. Thias The Amazing Chevy Volt Extended Range Electric Vehicle- Facts Guy

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