Treasury Gets Ready to Lose Another $5.1 Billion on its GM Bailout

Jeff Roberson/AP file photo

The Treasury Department announced that it would begin another round of sales of General Motors stock, with the hope of getting rid of its remaining 17.7% stake in the company in the next 12 to 15 months. Unfortunately for US taxpayers, this means the Treasury is essentially accepting a loss of $17.51 per share.

The government bailed out GM in late 2009 for $49.5 billion to prevent the troubled automaker from filing for bankruptcy. Some arithmetic shows that the government purchased shares at about $49.56 a pop. Since late 2010, it’s been reducing its stake in the company from a high of 60.4% to 17.7% today, according to data from ProPublica. As of today, shares of GM were trading for $32.05.

So if the Treasury sold its estimated 241.7 million remaining shares today, it would take a loss of about $5.1 billion just on its remaining stake in the company. The government may have actually turned a profit from bailing out Wall Street. The auto industry? Not so much.

Read more at Quartz.

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