Report: Treasury will lose on GM
DETROIT – General Motors stock would have to sell for $95.51 per share for taxpayers to break even on bailing out the company, according to a government watchdog’s report released today.
That price is about three times what GM shares are selling for now.
“There’s no question that Treasury, the taxpayers, are going to lose money on the GM investment,” Special Inspector General Christy Romero, author of the July quarterly report to Congress, said in an interview.
GM needed the $49.5 billion bailout to survive its trip through bankruptcy restructuring in 2009. In exchange for the bailout, the government got 61 percent of GM’s stock. It cut that to 33 percent in GM’s November 2010 initial public offering.
The government has gradually been selling off the rest of the stock, with the goal of exiting the investment by April of next year.
Taxpayers are still $18.1 billion in the hole on the $49.5 billion bailout, according to the report.
If the government sells its remaining shares of GM for the current stock price of $36.61, it would get just over $6.9 billion, meaning taxpayers would lose about $11.2 billion on the bailout.
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