US Treasury wants to see a higher stock price before selling its shares in GM

Article by Christian A., on September 23, 2012

Insiders said that the U.S. Treasury believes that the stock price of General Motors Co. will go up in the future, giving the government a better chance to reduce its losses in the automaker. The U.S. taxpayers provided the $50 billion bailout of GM in 2009. These people said that the government hasn’t yet come to a specific price threshold at which it would attempt to exit its remaining 500 million GM shares but the Treasury is closely monitoring the value of its stake.

Analysts think that one major factor that may boost GM shares in early 2013 is the planned release of very profitable large trucks. The Treasury thinks that with an expected increase in share price, the Treasury does not believe that it is wise to unload a large volume of shares prematurely at the present levels.

Since there are 500 million shares, a $1 increase in the share price could trim $500 million from the expected loss. GM had also thought that the U.S. automaker will buy back a portion of the Treasury's stake straight from the government. However, the government threw out this idea last year. Sources said that there are no recent high-level conversations with GM about the issue.

Last Friday, the Treasury Department released records of Geithner's meetings. It was found out that Treasury Secretary Timothy Geithner was in a meeting or talked with GM CEO Dan Akerson three times over five days in early March. The U.S. Treasury hasn’t made a comment yet. But in the past, government officials have said that they are aiming to sell the GM stake as soon as practicable while also optimizing the value for taxpayers.

Topics: us treasury, gm, shares

If you liked the article, share on:

Comments

Recommended

More efficient, more power and longer range. This is how we could best describe the electric version of the Volkswagen Golf for the 2017 model year. In terms of efficiency,...
by - February 28, 2017
If you think you’re all ready for the new 2018 Audi S4 sedan when it arrives in the United States this spring, then better make sure that your pockets are...
by - February 28, 2017
One of the executives at Volkswagen tagged in the so-called Dieselgate scandal has pleaded not guilty to a list of allegations surrounding the carmaker’s actions to cheat emissions regulations in...
by - February 27, 2017
When the Crown De Luxe saloon was first released in 1972, it was at that time the most lavish Toyota model available to British customers. Both unusual and exclusive, one...
by - February 27, 2017
The ride-sharing fleet of sharing Lyft Inc. will soon include thousands of specially fitted self-driving Chevrolet Bolt electric vehicles, courtesy of General Motors. If plans push through, Lyft’s clients would...
by - February 27, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries