Posted on 12/19/2012 7:43:06 PM PST by Nachum
A few days after divesting its stake in the firm that started it all, AIG, and at a profit at that (ignoring that the risk has merely been onboarded by the Fed whose DV01 is now $2+ billion as a result), the US Treasury continues to divest of all its bailout stake, this time proceeding to GM, where the channel stuffing firm just announced it would buyback 200MM shares from the US government at a price of $27.50. More importantly, the "Treasury said it intends to sell its other remaining 300.1 million shares through various means in an orderly fashion within the next 12-15 months, subject to market conditions. Treasury intends to begin its disposition of those 300.1 million common shares as soon as January 2013 pursuant to a pre-arranged written trading plan. The manner, amount, and timing of the sales under the plan are dependent upon a number of factors." Assuming a price in the $27.50 range, this implies a nearly 50% loss on the government's breakeven price of $54. So much for the "profit" spin. One hopes all those Union votes were well worth the now booked $40+ billion cost to all taxpayers.
One wonders why the US government did not open up this particular buyback to a public tender: after all some taxpayers may still care about the financial mismanagement of Uncle Sam. Then again, perhaps not.
From GM:
General Motors today said it will purchase 200 million shares of GM common stock held by the U.S. Department of the Treasury for $5.5 billion, or $27.50 per share. The share buyback is part of the Treasurys plan, also announced today, to fully exit its entire holdings of GM stock within 12 to 15 months, subject to market conditions.
(Excerpt) Read more at zerohedge.com ...
The list, Ping
Let me know if you would like to be on or off the ping list
The list, Ping
Let me know if you would like to be on or off the ping list
The loss was well worth the Obama win in November, heck I bet the unions stay healthier than the car company.
The loss was well worth the Obama win in November, heck I bet the unions stay healthier than the car company.
It would have also allowed for the shares to quickly find their true value based on the market, not the 1/2 billion + shares that he government had.
The good news is we will make up for it in volume.
The good news is we will make up for it in volume.
Am I the only one noticing the late model Chevrolets parked in vacant lots, and in the streets of residential neighborhoods with for sale signs on them?
I’ve seen them as I head into Riverside as well on my way to Corona.
I saw a couple of more of them today on my way over to Moreno Valley. Not just a particular Chevy model, but all models.
How many sets of books is the government using?
Look at the bright side- it takes the government only 2 months to print that kind of money, and right out of thin air!
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.