Quote:
Originally Posted by Apex Chase
Only part of the $50 billion GM received was in the form of a loan and they have paid that portion off. In return for the balance you mention, the government received $2 billion in preferred stock and 61% of the company's privately held common shares (that has since been reduced to something like 35%). The US Treasury (tax payers) is made whole (or as close as they will be) as GM continues to perform well and their position is sold off.
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The Fed was not legally allowed to liquidate the remaining holdings in GM (IIRC, just about 33%) until May 22nd, two days ago. If the Fed sells it's holdings at current PPS values, $30.83 at market close today, the taxpayers would lose a hell of a lot of money and the dillutive effect of selling those shares into the float would only drive PPS way lower. The conversion into common stock was made at a valuation near $60 PPS. The IPO was made too early at too high of a PPS imho.