WSJ: US to Sell GM Stake at $11 Billion Loss

Thursday, 21 Apr 2011 08:04 AM

By Forrest Jones

The government plans to sell most of its remaining
stake in General Motors in the coming months and lose $11 billion in the
process, The Wall Street Journal reports.

With taxpayer money, the
government rescued General Motors for $50 billion in 2009

To get that
money back, the U.S. Treasury will need to sell its remaining stake of around
500 million shares at $53 apiece.

gmceo200gtyy.jpg
GM Chairman and CEO Dan Akerson
(Getty photo)

GM is currently trading around
$30, even dipping below that figure, on the New York Stock Exchange, below its
$33-a-share November initial public offering.

“Planning for the sale of
our remaining GM stock is still at an early stage, and the IPO lock-up does not
expire until late May,” says a Treasury spokesperson, according to the
Journal.

“At that point, we will consider all of our options, based on
our twin goals of protecting taxpayers’ interests and exiting as soon as
practicable.”

Rising
fuel prices, production snags and management turnovers have hurt the company’s
stock price.

GM’s $23.1 billion IPO in November reduced the U.S.
government’s stake in the automaker to 26.5 percent from 61 percent.

As a
condition of the IPO, the Treasury isn’t able to sell additional holdings before
May 22.

The company, meanwhile, raised discounts to $400 per vehicle in
January and February with the aim of boosting sales, which didn’t help stock
prices at all.

Company CEO Dan Akerson says he supports the move. “I feel
pretty good about that. I think we’re in pretty good shape,” Akerson says,
according to the Associated Press.© Moneynews. All rights reserved.

Read more: WSJ:
US to Sell GM Stake at $11 Billion Loss

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