No more Government Motors: US selling GM shares, taxpayers likely to lose about $12B
Treasury said Wednesday that the investment in GM was worth it.
"The auto industry rescue helped save more than a million jobs during a severe economic crisis," said Timothy Massad, Treasury's assistant secretary for financial stability. "The government should not be in the business of owning stakes in private companies for an indefinite period of time."
Massad said that exiting the GM investment "is consistent with our dual goals of winding down TARP as soon as practicable and protecting taxpayer interests."
Initially the government got 912 million shares in exchange for the money it loaned to GM. It sold 412 million shares for $33 apiece in GM's initial public stock offering in November of 2010.
GM shares rose shortly after the IPO, but then slid as the U.S. economic recovery slowed and Europe's economy took a turn for the worse. As the shares fell, the government balked at further sales.
Although GM is paying a premium for the government shares, Ammann GM's other shareholders benefit because the number of shares on the market will be reduced about 11 percent. That should increase the value of the remaining shares.
The move was approved by the GM board on Tuesday evening after the company got opinions from its management and financial advisers, GM said.
GM will fund the deal out of its cash balance, which at the end of September was close to $32 billion.
AP Business Writer Martin Crutsinger in Washington, D.C., contributed to this report.
- Better than a raise: The smallest thing you...
- WestJet airline video goes viral as Santa...
- The Grand America and the Flower Patch: Once...
- Young adults are faced with risky decision to...
- University of Utah Health Care's AirMed puts...
- Companies make CEO changes in U.S. and Canada
- 2 financial goals you should revisit every year
- Utah gas prices among lowest in nation
- The American Dream is still alive for... 11
- Better than a raise: The smallest thing... 11
- System failure to blame for delayed... 9
- Leavitt stresses importance of allies,... 8
- Young adults are faced with risky... 4
- WestJet airline video goes viral as... 3
- Companies make CEO changes in U.S. and... 3
- The Grand America and the Flower Patch:... 3