News: GM will buy 200 million shares from U.S. Treasury

[Rob]

GM will buy 200 million shares from U.S. Treasury

Government plans full exit within 18 months

Mike Colias
Automotive News -- December 19, 2012 - 8:06 am ET

DETROIT -- General Motors today said it will buy 200 million shares of its stock from the U.S. Treasury for $5.5 billion and that the government intends to unload all of its shares within 18 months.

GM will pay $27.50 a share, an 8 percent premium over its current share price. GM CFO Dan Amman said the price was set through negotiations between GM and Treasury officials.

"This announcement is an important step in bringing closure to the successful auto industry rescue." CEO Dan Akerson said in a statement. "It removes the perception of government ownership of GM among customers and it demonstrates confidence in GM's progress and our future."

Full Story: http://www.autonews.com/article/20121219/OEM/121219869#ixzz2FVP0V7vO

 

[Old Ted]

I understand that to break even, the government would have to get around $70 per share. Why are they selling is beyond me unless they think GM is doomed and are just cutting their losses. It is strange.

 

[Mac]

I understand that to break even, the government would have to get around $70 per share. Why are they selling is beyond me unless they think GM is doomed and are just cutting their losses. It is strange.

Maybe Michelle Obama needs the money to fly to Paris and buy a new purse?

-Mac

 

[tankman]

I understand that to break even, the government would have to get around $70 per share. Why are they selling is beyond me unless they think GM is doomed and are just cutting their losses. It is strange.

That's $70/share CANADIAN dollars . .. .. so that works out about right!! (at least in the old days)
otfl :L

Eric

 

[Mac]

That's $70/share CANADIAN dollars . .. .. so that works out about right!! (at least in the old days)
otfl :L

Eric

The $Can is more than holding it's own, not only against the $US ($1 CAN = $0.9978 US) but against the Euro ($1 CAN = 0.7353 EU) and other currencies... but it's not that long ago that the $Can looked pretty pallid next to the greenback. Mind you, back in the 1970s, the $Can always dominated the $US until that generation started moving toward the socialist economic model. The result, as always, was inflation, devaluation of the $Can and deficit spending to pay for social-ist programs... basically economic chaos...

We've been pretty lucky in the current economic downturn as we have a conservative government federally. I hope our largest trading partner starts to rebound soon.

-Mac

 

[Old Ted]

Economic Barometer

I've always used vehicle sales as a barometer as to the direction of the economy. When times start to get a little tough, buying a new car is the first bigger purchase that gets put on the back burner. Based on that, the American economy appears to be improving a little but here in Canada we are starting to head in the other direction. See if I am wrong. Housing is the next big purchase to move and house sales have really slowed down in Canada. Canada was in better financial shape than the U.S. in 2008 so didn't suffer the same crash. However, we do have a lot of debt and our jobs too have gone to China. The job losses are what are starting to affect the Canadian economy now. Am I wrong??? If I were GM and seeing the American economy starting to inch back up somewhat, I'd be buying my stocks back too. The real worry is government debt and the inevitable crash of the American dollar that will result. If not a crash, it will be a steep slide.

The $Can is more than holding it's own, not only against the $US ($1 CAN = $0.9978 US) but against the Euro ($1 CAN = 0.7353 EU) and other currencies... but it's not that long ago that the $Can looked pretty pallid next to the greenback. Mind you, back in the 1970s, the $Can always dominated the $US until that generation started moving toward the socialist economic model. The result, as always, was inflation, devaluation of the $Can and deficit spending to pay for social-ist programs... basically economic chaos...

We've been pretty lucky in the current economic downturn as we have a conservative government federally. I hope our largest trading partner starts to rebound soon.

-Mac