Treasury To Hold Onto GM Stock As Price Hits New 52-Week Low
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Yesterday afternoon, the trading price on GM’s stock sank below $20, despite reporting very positive sales gains. In light of the stock’s downturn — which falls way short of earlier predictions — the United States Treasury has opted to “be patient” on selling its 500 million shares of the company, which translates to a 26.5 percent stake. The Treasury was expected to sell around this time in the year.
If Uncle Sam was to sell tomorrow, he would lose roughly $16.5 billion of the $49.5 billion investment that was put into the company, which is obviously less than ideal. However, GM shares would need to be trading at $53 a piece in order for the Treasury to break even, and that could take a while, if ever, with the current state of the world’s economy.
Source: The Detroit News
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