GM Moves To Buy Back Over 2 Billion Dollars Of Federally Owned Stock

Will they buy them back at BOOK value? That's important, because the US Government (AKA The Taxpayers) purchased those common shares as grossly inflated prices, and analysts say GM stock is unlikely to ever see that price traded in the open stock market.

what price was that?

upwards says "what price was that?"

The government's break-even price for GM: $133.78 per share, according to http://www.msnbc.msn.com/id/39316448/ns/business-autos and others.

FYI: GM share price, Close $1.15, 52-Week Range $0.27-$18.18

uhm... this of course assumes they have the same number of shares floating around right?... it wouldn't be hard to sell them at $200 per share...

Steve currently there is no stock offer

"FYI: GM share price, Close $1.15, 52-Week Range $0.27-$18.18" means nothing.

Joe_Limon says "uhm... this of course assumes they have the same number of shares floating around right?... it wouldn't be hard to sell them at $200 per share..."

It doesn't matter how many mores shares are issued with respect to the government's books value. The Feds needs $133.78 per share to break even. Restated, the Feds pumped a whole lotta cash into GM by way of paying way above market value for GM common shares. To the unknowing public, it sounds like the Feds simply bought some stock. To those who understand how stocks work, it's sort of like me buying a GN Ncar for $2B -- I'll never get my money back because nobody in their right mind would pay $2B for that same car. I own a near worthless car, and you got a huge wad of my cash. Ditto with the Fed's purchase of GM shares at waaaay above market value.

Where do you get your info from?

Yes, according to this news report, that's exactly what happens. See the xample below using *EXAMPLE* numbers:

(1) Feds by 100 shares of GM stock at $1,000 each, even though the market price is only $2. GM gets $100,000 and the Feds get 100 shares of GM stock.

(2) GM stock resumes trading, or a GM IPO is offered. Markey value for GM stock is $3.

(3) GM buys back the 100 government shares at $3 each for a total of $300. The Feds get $300 and GM gets all their shares back.

(4) On GM's books: $100,000 earnings at saher sell, less $300 paid on the same stock when pouchased back = $99,700 profit.
On the Fed's books: $100,000 paid on the shares at time of purchase, less $300 earned when selling those shares = $99,700 LOSS.

But of course, we're talking billions of dollars and millions of shares in real life. GM holds its head up high for having bough back all its shares and declares "we're even with the Feds", AND "we're profitable", while the Feds... and us tax-payers... assume GM's previous multi-billion dollar losses. The cancer has been sucked out of GM, and injected into the tax-payers.

Tough crowd! Hi, Joe!!! Love your bacon!

Best bacon in the world!