Do You Favor A Government Loan To The Detroit 3?

Comments

• gagrice Member Posts: 31,450

  December 2012

  We will officially start losing 50% of our investment in GM by the end of the year.
  
  Uncle Sam Books 50% Loss As Government Motors Buys Back 200MM Shares From Tim Geithner
  
  http://www.zerohedge.com/news/2012-12-19/gm-buys-back-200mm-shares-us-government- -uncle-sam-divest-remaining-stake-50-loss
  
  The Detroit automaker said it will purchase 200 million shares of GM stock held by Treasury for $5.5 billion — or $27.50 per share
  
  Still, taxpayers will almost certainly lose billions of dollars in the $49.5 billion GM bailout - and the government would need to sell its remaining shares for about $70 each to break even.
  

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• stever Guest Posts: 52,454

  December 2012

  "As told in "Overhaul," Rattner's book about the bailouts, it was Wilson who concluded that GM's obligation to the U.S. Treasury would have to be "equitized" -- in the form of stock rather than loans -- or else GM would sink under the burden of too much debt.
  
  "I thought GM was dirt cheap a year ago and the stock is up 38% since then, and I still think it's attractive," he wrote."
  
  Architect of GM bankruptcy says stock is undervalued (Detroit Free Press)

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• berri Member Posts: 10,165

  December 2012

  Since I think the gov doesn't directly loan, but rather guarantees the loan, it may have ridden on what interest rates the lenders would have required. Remember, a lot of banks were in a crisis back then too and liquidity dried up.

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• gagrice Member Posts: 31,450

  December 2012

  

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