Thursday, January 13, 2011
Just a passing story on the economy in the midst of all the political news..
The Initial Public Offering (IPO) of stock for Government Motors was a huge bust, and the Feds were forced to sell a large block of shares it was holding as 'collateral' for the $85 billion GM bailout at a below break even price (otherwise known as a loss) of $33 per share. As I reported earlier, for taxpayers to break even the stock would have to rise to at least $52 and by some estimates as high as $103 — levels that would take years to achieve if they ever got there. The article linked claims the break even was $44.59 a share, which doesn't correspond to any rational data or sources I've seen, but why quibble?
This stock dumping - which might actually be against SEC rules if a private investor did it - pretty much means the American taxpayer will never fully recoup what it cost to gift GM to the UAW, screwing over the private equity holders in the process.
Of course it's not just the stock dumping. There's also that $45.4 billion dollar tax credit against future profits at the American taxpayer's expense given to them by the Obama Administration that could keep GM tax free for years.
Needless to say, some of the profits coming from the UAW's equity in Government Motors will be recycled straight into the Democrat party coffers as political donations.
Nice the way that works.