GM stock lower amid report of quick govt sale
(AFP) – 14 hours ago
NEW YORK — A report that the US government plans to sell off much of its remaining stake in General Motors this year despite the firm's lackluster share price caused investors to flee the stock Tuesday.
After the Wall Street Journal reported a government sale could come within the next six months, GM's shares fell by nearly 1.3 percent to end at $29.59.
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.
The summer sale would make it more likely that the government could unload the remainder of its shares before the 2012 election season.
But officials said planning is still at an early stage and the Treasury Department was still considering options that would protect taxpayers while ending its stake in the company as soon as practicable.
The paper added that GM would back the sell-off because it would lift restrictions on executive pay that remain in place as long as the government is part owner.
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