GM to Buy Back 200 Million Government Shares

By on December 19, 2012 in Current Events with 16 Comments

General Motors said Wednesday it will spend $5.5 billion to buy back 200 million shares of its stock from the government.

The U.S. Department of the Treasury in turn announced its intent to fully exit its remaining 300 million in GM stock starting in January, subject to market conditions.

Treasury currently holds 500.1 million shares of GM common stock. Treasury intends to exit that investment through the following means:

  • GM said it will purchase 200 million shares of common stock from Treasury at $27.50 per share.
  • This transaction is expected to close by the end of the year.

Treasury 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. The disposition of the additional 300.1 million common shares will begin as soon as January 2013 pursuant to a pre-arranged written trading plan.

The move may help to boost GM’s share price, however, if the government sells its shares at current prices, taxpayers would lose more than $13 billion.

© 2016 Ian Smith. All rights reserved. This article may not be reproduced without express written consent from Ian Smith.

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Ian Smith is one of the co-founders of FedSmith.com. He enjoys writing about current topics that affect the federal workforce. Ian also has a background in web development and does the technical work for the FedSmith.com web site and its sibling sites.

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  1. Pruitt2008 says:

    Whether the bailout is a loss or a gain for taxpayers, on a straight dollar basis, requires considering taxes received from workers, and from those whose businesses made sales that would not have been made but for the bailout, as well as safety net spending NOT incurred because the workers kept their jobs. 

    Given the income tax revenues just from the auto industry employees who were not laid off, never mind the businesses those employees patronized with their auto company incomes, hasn’t the government already recouped more than the $28 billion or whatever the final number was?  If you assume the bailout saved 1 million jobs, and that the average income of those jobs was $80,000, and an average annual federal tax bill of around $10,000, doesn’t the federal government take in about $10 billion a year for every year the companies stay open?  And doesn’t that put the nation already in the black by billions of dollars, wholly independent of any stock sales already completed, or to be completed?And doesn’t the straight economic profit for the nation continue every year the companies stay open?And if we add in the collateral businesses that made sales to the auto workers and their families, doen’t the increased tax revenues multiply from that $10 billion annually?What investor (who would receive the tax revenues from the workers whose jobs were saved) would not take that deal?And unless those calling the bailout an economic drain on the government and the economy at least address the tax revenue streams preserved by the bailout, aren’t they just pretending that the BIGGEST economic benefit to the government and the taxpayers simply does not exist?

  2. newbie says:

    hurray! the bond holders were given the shaft (breaking contract law), private dealers were put out business, the tax payers foot the bill of billions — and Govmit Motors is still a crappy managed company headed for another bankruptcy.

    congratulations, Obama — and the His libtard followers.

    • Pruitt2008 says:

      Yeah, it’s not like GM can ever recover its historic position as the number 1 seller of cars in the world.  Is it?

      • Danl_P says:

        No, they can’t. The UAW got their way and Obama got his payoff. Now the taxpayers will lose billions giving the stock back to the mafia-run Guvmint Motors. This jackass is the smartest person in the Democrat party? Yeah. probably/ remember the 47%? Have the popuilation is below the median IQ. That is who Obama’s 47% really are. Bottom dwellers.

        • Pruitt2008 says:

           It was a trick question.  GM already has regained its place as the #1 selling manufacturer. 

          Not sure what that means about your comments about jackass and smart but I think you’re closer to being the former than the President is.  He was right and you are wrong. 

          The “47%” was a lie from the start.  And it was your guy who got 47%.  “This jackass” got 53%, and he got a lot of votes from people not getting “gifts.”  Of course “gifts” are the primary method of the Rs.  Gifts to the very rich, who do not need them and who, even though they do not need them, do not use them to create jobs.  So get off the “47%” lie already.  It failed as a tactic because it failed as the truth.  It was and is a lie. 

          And calling retired soldiers “bottom dwellers,” calling Social Security recipients “bottom dwellers” (bet that will include you before you turn 66, and bet it included or includes your parents), calling people working 2 jobs and calling soldiers who still qualify for food stamps “bottom dwellers” just makes you a jerk.  It does not make you sound smart, or reasonable.  (BTW, isn’t Ron Paul collecting Social Security?  How many people do you think actually decline SS?  So 90% of Americans over 65 are “bottom dwellers”?  That is a helluva bottom.)

  3. Badfed says:

    Typical non-sequitor from GrannyBunny.  Good for GM for shafting the US taxpayers out of 13BILLION or more.

  4. Marbles says:

    Are you kidding? GM said they will pay $27.50 per share. How about this, $55.00 per share plus the expense to do all the paperwork? If they say it’s too much, liquidate them or sell to an American company who will pay.

  5. DON_Supervisor says:

    As part of the agreement, GM said it will buy 200 million shares of its own common stock from the government for $27.50 each, amounting to a $5.5 billion buyback. That represents a 7.9% premium on GM’s close at $25.49 on Tuesday.The U.S. said it plans to unload its remaining 300 million GM common shares on the open market within the next 12 to 15 months, beginning as soon as January and based on a pre-arranged written trading plan. That remaining chunk represents about 19% of the outstanding shares.However, even if the U.S. receives $27.50 a share for its remaining shares, the government would be a little over $7 billion short of recouping the entire $49.5 billion bailout.

    • Black_Diamond says:

      The loss  amounts to $22 for every citezn, was it worth saving 1.5 million jobs? Yep. Ask Ohio who voted  Democratic, GOP,. LOLOL

      • HDandIT says:

        98,000 of GM’s 207,000 jobs are in North America (from Forbes).  1.5 million jobs?  Not sure where you got that number, but the government bailed out a company that does most of its manufacturing overseas. 

      • Pruitt2008 says:

         1.5 million jobs, for $7 billion is a one-time investment of about $5,000 of government investment for each job, which average around $60,000 or so, don’t they?  How much do $60,000 income earners pay in taxes each year, for every year they work?

        How many times has the government invested way more than $7b and NOT gotten 15 million jobs, each of which pay taxes EVERY YEAR well over the one-time investment? 

        How is that a bad deal?

  6. grannybunny says:

    Good for them!

    • newbie says:

       so you are happy that taxpayers lose billions?  I hope your job at USPS does not involve math.  Man, are you dense.

      • grannybunny says:

        onedonewong, you added yet another screen name!  No one — including the omniscient you — will know what the final net loss, or gain, will be until the final shares are sold, within the next 12-15 months .

  7. Allan says:

    How much did we pay per share in the bailout?  Will this be a loss, gain or even sale??

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