The sale by the Treasury Department marks the beginning of its plan to dispose of taxpayers’ holdings in GM, which will total about 300 million shares — about 19% of shares outstanding — after today’s sale.
GM will take a one-time charge of about $400 million in the fourth quarter as a result of the purchase. Following the purchase, GM’s shares outstanding will decrease by approximately 11%, and the company expects the transaction to be accretive to earnings per share.
The Treasury Department plans to dispose of its remaining shares over the next 12 to 15 months, and may begin selling its shares “into the market through various means and in an orderly fashion” as soon as next month.
U.S. taxpayers owned 26% of GM after the $49.5 billion bailout of the company in 2008 and 2009. At today’s selling price, U.S. taxpayers are taking a significant loss. For the total of 500 million or so shares the Treasury owned before today’s sale, a share price of about $53 would have been needed for taxpayers to break even on the deal.
Paul Ausick
Get Ready To Retire (Sponsored)
Start by taking a quick retirement quiz from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes, or less.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future
Get started right here.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
