Quote:
Originally Posted by jrc1122
I'm not buying shares of GM until it proves itself, and it hasn't done so (IMO)
I mean if you count that commerical where they mislead us about how they paid back the bail out already. When in fact they simply shuffled other government funds. IE TAX payer's money, from one side of the sheet to the other.. Then yes they have proved themselves.. Proved to be liars.
But that is all the proof I need to steer clear of GM right now.
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Oh my god... This is the biggest bit of misinformation about the bail out ever...
GM did not just "shuffle" money to pay the bailout.
The bailout had multiple sections.
Section A was a loan for X amount.
Section B was a payment of Y amount in exchange for stocks (investment) in the company. GM does not need to repay this money, and in fact cannot, because the government already got its return in the form of stocks. If the government wants money off of those stocks, they simply have to sell them (which they will be doing).
The money from Section A was used to stymie immediate cash flow problems. The money from Section B was put into "savings," for lack of a better term, as a kind of emergency fund. As GM began to return to profitability, and risk slowly dropped, they took some of that Section B "savings" and used to pay off the loan from Section A. The government still has their stocks, and GM simply has less cash on hand.
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