(Image Source: Detroit Free Press)

BY JOHN O’CONNOR

ANCHOR NEVILLE MILLER

General Motors has announced it will buy back 200 million shares of its stock from the U.S. Treasury, moving the government one step closer to ending its controversial automaker bailout. Fox Business Network has the details of the purchase.

“This is the first step in a government plan to exit the automaker completely within the next 12 to 15 months. GM will pay $5.5 billion or $27.50 a share … ” 

According to the Detroit Free Press, “That would reduce the government stake [in the company] from 26% to 19%. The U.S. plans to exit its equity stake in GM … by selling its remaining 300 million shares in the market.” 

A business correspondent for CNN says while the bailout did a lot of good for American autoworkers, it’s going to produce a loss on the side of everyday taxpayers.

“We are going to lose money on this bailout, and how much will depend on how much the shares are sold for. And that is why the treasury says even though the auto-bailout saved a million jobs, the government shouldn’t be in the business of own stakes in private companies … ” 

According to the Wall Street Journal, the U.S. Treasury will have recovered about $29 billion of the $50 billion invested in GM after the purchase goes through.  

“The Treasury had been reluctant to sell its 500 million shares because it needed the stock to hit $52.39 for the government to break even. Now it must sell its remaining shares at $69.72 to hit the break-even mark.”  

Businessweek reports the Treasury will begin selling the rest of GM’s shares as early as January. 

GM Bailout Buyback Promise: $5.5 Billion

by John O'Connor
0
Transcript
Dec 19, 2012

GM Bailout Buyback Promise: $5.5 Billion

 

(Image Source: Detroit Free Press)

BY JOHN O’CONNOR

ANCHOR NEVILLE MILLER

General Motors has announced it will buy back 200 million shares of its stock from the U.S. Treasury, moving the government one step closer to ending its controversial automaker bailout. Fox Business Network has the details of the purchase.

“This is the first step in a government plan to exit the automaker completely within the next 12 to 15 months. GM will pay $5.5 billion or $27.50 a share … ” 

According to the Detroit Free Press, “That would reduce the government stake [in the company] from 26% to 19%. The U.S. plans to exit its equity stake in GM … by selling its remaining 300 million shares in the market.” 

A business correspondent for CNN says while the bailout did a lot of good for American autoworkers, it’s going to produce a loss on the side of everyday taxpayers.

“We are going to lose money on this bailout, and how much will depend on how much the shares are sold for. And that is why the treasury says even though the auto-bailout saved a million jobs, the government shouldn’t be in the business of own stakes in private companies … ” 

According to the Wall Street Journal, the U.S. Treasury will have recovered about $29 billion of the $50 billion invested in GM after the purchase goes through.  

“The Treasury had been reluctant to sell its 500 million shares because it needed the stock to hit $52.39 for the government to break even. Now it must sell its remaining shares at $69.72 to hit the break-even mark.”  

Businessweek reports the Treasury will begin selling the rest of GM’s shares as early as January. 

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