http://www.theatlantic.com/business/archive/2011/05/gms-bailout-has-been-a-huge-net-loss/238795/GM's Profits are Still a Huge Net Loss For Taxpayers
About $40 billion of the money that the government gave GM was converted to GM common stock. In the November IPO, the government made about $20 billion selling 478 million shares, leaving us with around $20 billion more to recoup on our remaining 26.5% stake in the company. That means we need to sell the approximately 365 million shares we have left at about $55 per share, net of underwriting and legal costs. At the current share price of $31, we'd be left with a loss somewhere north of $9 billion--plus the $1 billion we gave the "old GM" to wind things up, and the $2.1 billion worth of GM preferred stock we own. Since I don't know the details of the preferred transaction, I'll leave that out, which gives us a loss after expenses of $10 to $11 billion on our investment in GM.
But of course, that assumes that the current share price holds. It could well fall over the next few months--or when the government dumps an enormous new supply of GM stock on a market that isn't showing all that much enthusiasm for the product.
It also leaves out a very important extra: the $14 billion gift that the government seems to have handed the company, in the form of a special tax break:
Lesson of Bailout-nomics? Any company can be a "success" if you give it enough money.
Wall Street says thanks by the way!
