Quietly - GM Costs Taxpayers $$$ Billions

[taft2012]

http://www.nbcnews.com/business/gm-buys-back-stock-taxpayers-may-lose-billions-1C7659301

Well this story flew well under the media radar. The official story for years has been: "Obama saved the auto industry and the US taxpayers are actually going to make money on the deal! Whatta guy Der Obahmer is!"

So said the in-the-pocket national news media.

Now, very quietly, the truth is revealed.



General Motors will repurchase 200 million shares of its own stock currently held by the U.S. Treasury, with the White House announcing plans to sell off its remaining 300 million shares within the next 12 to 15 months.


The automaker will pay $27.50 for the shares it will acquire, a 7.9% premium over the $25.49 closing price on December 18, 2012 – but that is also a sharp discount from the $33 price set during GM’s initial public offering in November 2010. And it means taxpayers will lose billions on the sale.


“This announcement is an important step in bringing closure to the successful auto industry rescue, it further removes the perception of government ownership of GM among customers, and it demonstrates confidence in GM’s progress and our future,” said Dan Akerson, chairman and CEO of GM.

http://dealbook.nytimes.com/2012/12/19/treasury-to-sell-g-m-stake-within-15-months/




For months, General Motors executives have been pressing Washington to sell its stake in the company, desperate to rid itself of the yoke of being called Government Motors.


Nearly four years after what became a $49.5 billion bailout, the Treasury Department announced on Wednesday that it would sell 200 million shares back to the company for $5.5 billion, then sell an additional 300 million shares by early 2014.


Currently, the exit would produce a loss of more than $12 billion for taxpayers

[Kathianne]

It is depressing, 4 more years:

http://www.debatepolicy.com/showthread.php?38332-US-Taxpayer-via-GM-Buy-High-Sell-Low&p=600925&highlight=#post600925

[fj1200]

Well this story flew well under the media radar. The official story for years has been: "Obama saved the auto industry and the US taxpayers are actually going to make money on the deal!


And it means taxpayers will lose billions on the sale.

When was the last time anyone touted that the US would make money on the deal? Besides, the only difference between before and after the deal is a realized loss. I'd take a loss on the whole deal right now if it means they get out of the position.

[taft2012]

When was the last time anyone touted that the US would make money on the deal? .

http://www.cbsnews.com/8301-505123_162-48740289/will-taxpayers-ever-make-back-their-money-on-gm-uh-yeah/



Results like this could easily double GM's IPO price of $33 per share, taking it into the $60-70 range. At which point the company would be approaching a market cap of $100 billion, providing an easy opportunity for the Treasury to sell what's left of it's original $50 billion stake in GM for a handsome profit, depending on when it decides to pull the trigger (a gradual sell-off of its 60 percent stake is obviously the game plan). This, by the way, would be a real payback, not a stealth payback (http://www.fool.com/investing/general/2010/09/17/will-general-motors-ever-pay-us-back.aspx) of the type that former GM CEO Ed Whitacre got clonked for last year.

[Kathianne]

http://www.cbsnews.com/8301-505123_162-48740289/will-taxpayers-ever-make-back-their-money-on-gm-uh-yeah/

Good find, for those that don't check:


By Matthew DeBord /
MoneyWatch/ April 4, 2011, 5:11 PM
Will Taxpayers Ever Make Back Their Money on GM? Uh, Yeah


...

[Robert A Whit]

When was the last time anyone touted that the US would make money on the deal? Besides, the only difference between before and after the deal is a realized loss. I'd take a loss on the whole deal right now if it means they get out of the position.

Taxpayers seem to have separate views on the impact. See, when it is SS money, suddenly it is our money. When it is to fight wars, again, our money.

But when the Feds lose these billions, suddenly and especially the democrats, it becomes the government's money.

A tax is the stake that the government drives into your heart.

Bear that in mind. You earn the money but all they need do is not earn it, but simply demand you pay them. Now it is their money.

I have yet to resent taxes that I believe are to run the country or local governments incl. state government.

But when we hear of the waste, the way the feds shit all over the doctors they claim to support, it makes me angry. I posted some proof that medicare can and does shit all over your doctor. I wonder, how long will doctors take this crap?

We don't even get a discount on any General motors products showing how much the company thanks us for the help.

[fj1200]

http://www.cbsnews.com/8301-505123_162-48740289/will-taxpayers-ever-make-back-their-money-on-gm-uh-yeah/


Good find, for those that don't check:

:laugh: Correct answer? 20 months apparently. And that doesn't count the sweet tax-loss carry-forward that they were given by Treasury.

[taft2012]

:laugh: Correct answer? 20 months apparently. And that doesn't count the sweet tax-loss carry-forward that they were given by Treasury.


That was simply the first example I found on the Google return. I'm sure if I searched for more than the 5 seconds I did search I could find a more recent example.

But that's besides the point... when you're sold something based on a lie, does it really matter how long after the sale the lie is stopped being repeated?

[Tyr-Ziu Saxnot]

When was the last time anyone touted that the US would make money on the deal? Besides, the only difference between before and after the deal is a realized loss. I'd take a loss on the whole deal right now if it means they get out of the position.

That's not really the point . The government should have never got in the position in the first place is the point IMHO. BANKRUPTCY WOULD HAVE BEEN THE BETTER CHOICE. The federal government jumped in to further its agenda of increased
power! Now it ripped many people and gave much of it to the union. Again flexing its muscle.
Yet again the taxpayers get shafted and the sick part is both obama and the government get massive praise for this scam and corruption!! -Tyr

[fj1200]

That's not really the point . The government should have never got in the position in the first place is the point IMHO. BANKRUPTCY WOULD HAVE BEEN THE BETTER CHOICE. The federal government jumped in to further its agenda of increased
power! Now it ripped many people and gave much of it to the union. Again flexing its muscle.
Yet again the taxpayers get shafted and the sick part is both obama and the government get massive praise for this scam and corruption!! -Tyr

Which is not the argument right now. They are in that position and they should get out IMO and not dither about in some quixotic quest to be made whole. The taxpayers are not getting shafted again, the shafting already happened. I don't think they're getting any more praise right now otherwise this recent news wouldn't be done "quietly."

Besides, they did go through bankruptcy, it's just the method by which they came out which was the problem.

[red states rule]

http://media.townhall.com/Townhall/Car/b/payn_c10593920121221120100.jpg