Wednesday, April 20, 2011

Obama to dump GM shares at a loss

Last July, Obama went to Detroit and chided critics who claimed we would lose money on the auto bailout.
The president chided naysayers in Washington whom he called ”leaders of the just-say-no crowd.” These critics of the bailout plan, he said, called the U.S. auto companies the worst investment one could make. He said they were too willing to walk away from the ailing businesses and allow them to fail, taking as many as a million jobs with them.
Nine months later, the Obama administration is planning to dump it's GM shares for a $11 billion loss.
The government sale would "almost certainly" mean that US taxpayers would take a loss from a politically controversial $50 billion rescue of the auto giant in 2009, according to the paper.

The government would need to sell its roughly 500 million shares for $53 dollars each in order to break even, but GM's stock is currently hovering at a price of just under $30 per share.

At the current price, the government would lose more than $11 billion, but the Obama administration is willing to accept the loss in order to cut its last ties to the auto manufacturer, the newspaper said, citing unnamed sources.

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