In yet a new corporate welfare move to help out Government motors, the Obama Administration is going to sell half of its stock in the corporation back to GM, and taxpayers will take the loss.
For the government to recoup its money it used to buy the stock, it would have to sell them for $53 a share.
They're being paid $27.50 per share.
Remember, these stocks were acquired in exchange for the loans made by the government to the corporation. The loans were converted to stock which is now being sold back at a loss thus having the government incur the loss and allowing GM to announce all their government loans are paid off and to receive billions without needing to really pay the billions back.
Government Motors indeed.
The Obama administration said Wednesday it will sell 200 million shares — or 40 percent of its remaining stake in General Motors Co. — back to the automaker and announced plans to completely exit the Detroit automaker by March 2014.
. . .
Still, taxpayers will almost certainly lose billions of dollars in the $49.5 billion GM bailout. If the government sold the rest of its stock at current prices, taxpayers would lose more than $13 billion.
Since the article refuses to do the math I guess I'll have to do it for them: if 60% of the remaining stock sold at this price would mean the taxpayer suffers a $13 Billion dollar loss, then the government selling the 40% at this price right now is an $8.7 Billion dollar loss.
The Detroit Free Press fared no better in its report, but at least acknowledged that for the government to break even with its remaining shares after this deal it would require thiose share to be sold for $70 a share to break even, up from having to sell all of them at $53 per share to break even rather than this 40% at $27.50. The Freep, just like the Detroit News won't do the math nor report the actual loss that will be incurred by this sale.
I would have thought that would have been rather newsworthy and an important fact to put in the article, don't you think?