I Sure Am Glad We Bailed Out GM

Saturday 18 August 2012 - Filed under Uncategorized

Oh. Wait. No I’m not. Forbes:

President Obama is proud of his bailout of General Motors. That’s good, because, if he wins a second term, he is probably going to have to bail GM out again. The company is once again losing market share, and it seems unable to develop products that are truly competitive in the U.S. market.

Right now, the federal government owns 500,000,000 shares of GM, or about 26% of the company. It would need to get about $53.00/share for these to break even on the bailout, but the stock closed at only $20.21/share on Tuesday. This left the government holding $10.1 billion worth of stock, and sitting on an unrealized loss of $16.4 billion.

Right now, the government’s GM stock is worth about 39% less than it was on November 17, 2010, when the company went public at $33.00/share. However, during the intervening time, the Dow Jones Industrial Average has risen by almost 20%, so GM shares have lost 49% of their value relative to the Dow.

Great. Bailed out to the tune of billions of dollars, and just a couple of years later, they’re already in financial trouble, unable to adequately compete on their own turf.

2012-08-18  »  madlibertarianguy