GM’s IPO is seen as a victory for Obama on auto bailout, report says

Article by Christian A., on August 27, 2010

Both the supporters and critics of President Barack Obama will be focused on how successful General Motors Co.'s public offering will be. If GM would be able to stand on its own again in the capital markets, Obama will consider it a victory since he has been citing its progress as proof of the success of the auto bailouts.

Obama is banking heavily on the public offering as November elections near.The US Treasury is closely involved in the process of selling its 60% federal stake in GM.

However, the White House has asserted that it plays no role in the offering that will land on Wall Street this fall.

By recovering a sufficient amount of the $43 billion still owed by GM in a first stock sale, taxpayers become the minority investors.

If this milestone is reached, Obama and the Democrats will be able to put up a strong case against the Republicans who have been aiming to illustrate the 2009 bailouts of GM and Chrysler Group as government intervention in the private sector.

If the public offering proves to be a failure, Obama would be placed in a bad light as he had approved much of the $50 billion GM bailout and bankruptcy.

As a result, the taxpayers became the largest shareholder in an uncertain market. [via autonews]

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Topics: gm, ipo, united states

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