Money to Burn: Taxpayers Take a Loss on GM Stock Buy Back

December 20, 2012

Taxpayers spent $49.5 Billion on the GM stock buyout.  To break even, we would need to sell the stock (back to GM or to someone else) at about $53/share.  On Wednesday, GM announced it was buying back 40% of the shares owned by the federal government (that’s us) at $27.50/share.  That’s a “loss” of about 50% on our “investment”!

gmmotorama

Plans to buy back the remaining stock will be announced early next year. I guess it is possible that GM will make a miraculous turnaround in the next few months, shooting values up to our new “break even” target value of about $70/share.  But I doubt it.  As already discussed, the bailout did not prevent GM from declaring bankruptcy.  It’s a bust!

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