U.S. will wait for GM’s earnings in the first quarter before selling shares

Article by Christian A., on April 18, 2011

The U.S. Treasury Department will only decide if it will sell more of its investment in General Motors Co. after it has examined the carmaker’s earnings in the first quarter, according to an insider. Beginning May 22, the Treasury could sell a portion of its remaining 500 million GM shares, which are equivalent to a 33% ownership.

The source said that officials are waiting to receive first-quarter results and to monitor the stock when the bondholders in GM’s bankrupt predecessor company are given shares to partially compensate them. This year in New York trading, GM has dropped 19%. It also dropped 9.3% from its IPO price.

The source divulged that the Treasury is willing to lose on the shares, which closed last Monday at $29.97. On the other hand, the Obama administration is aiming to get a price that is in the range of the $33 IPO price at least.

Just to break even on its investment, the U.S. government will have to sell shares at about $53 each. As the lockup period is set to expire on May 22, the Treasury may file to sell shares with a traditional S-1 filing.

The actual sale may be put off until June as the Securities and Exchange Commission would then have to review the offering like an IPO. If the Treasury Department chooses to wait until July 1, the U.S. government could sell shares without having to go through a comprehensive review.

As a result, the offering would get started earlier. The source added that if this is the case, it’s likely that the Treasury will wait until GM posts earnings in the second quarter before selling more stock, meaning that the sale will be delayed until August.

Topics: gm, united states

If you liked the article, share on:

Comments

Recommended

Like it or not, Chevrolet may soon be offering a cheaper Camaro in hopes of competing with Dodge Challenger and Ford Mustang GT. Apart from the less expensive trim, the...
by - August 17, 2017
Recently, Porsche revealed a new Macan Turbo wearing a Performance Package and a unique Porsche Motorsport themed paint. At first look, it will remind you of the 919 Hybrid and...
by - August 17, 2017
The BMW M1 will be one of the most exclusive cars that will be showcased at the upcoming 2017 Pebble Beach Concours d'Elegance, alongside many other extravagant models. Firstly, there...
by - August 17, 2017
Aston Martin Vanquish Zagato makes its debut with a total of four variations including the Speedster and the Shooting Brake trims. As part of the limited edition model, the company...
by - August 17, 2017
Mitsubishi finally introduces the new Xpander MPV at the 2017 Indonesia International Auto Show in Jakarta Indonesia. Replacing the previous Expander, the new multipurpose vehicle will be mostly sold at...
by - August 16, 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