Taxpayers will be out a few billion dollars after the federal government sells 40% of its stock in General Motors. Who's buying? Well, General Motors is, for $27.50 a share.
GM is buying the stock at an inflated price, nearly $2 over its Tuesday stock value, though news of the buyback caused its stock to jump on Wednesday. Regardless, the government will recover roughly $28.6 billion of its initial $49.5 billion during GM's bailout in 2008 and 2009.
The Treasury also announced that it's planning to sell its remaining shares within the next 12 to 15 months, depending on market conditions, Detroit News reports.
For the government to break even now, it'd need its remaining 300 million shares to sell for $53 a pop, according to Mlive. But that's unlikely, writes Felix Salmon for Reuters, as the stock has averaged around $27.95 during its 25-month life.Via Detroit News, Mlive, and Reuters.