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Getbig Main Boards => Politics and Political Issues Board => Topic started by: Soul Crusher on December 20, 2012, 01:06:31 PM
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Uncle Sam Books 50% Loss As Government Motors Buys Back 200MM Shares From Tim Geithner
zero hedge ^ | 12/19/12 | tyler durden
Posted on Wednesday, December 19, 2012 10:43:06 PM by
A few days after divesting its stake in the firm that started it all, AIG, and at a profit at that (ignoring that the risk has merely been onboarded by the Fed whose DV01 is now $2+ billion as a result), the US Treasury continues to divest of all its bailout stake, this time proceeding to GM, where the channel stuffing firm just announced it would buyback 200MM shares from the US government at a price of $27.50. More importantly, the "Treasury said it intends to sell its other remaining 300.1 million shares through various means in an orderly fashion within the next 12-15 months, subject to market conditions. Treasury intends to begin its disposition of those 300.1 million common shares as soon as January 2013 pursuant to a pre-arranged written trading plan. The manner, amount, and timing of the sales under the plan are dependent upon a number of factors." Assuming a price in the $27.50 range, this implies a nearly 50% loss on the government's breakeven price of $54. So much for the "profit" spin. One hopes all those Union votes were well worth the now booked $40+ billion cost to all taxpayers.
One wonders why the US government did not open up this particular buyback to a public tender: after all some taxpayers may still care about the financial mismanagement of Uncle Sam. Then again, perhaps not.
From GM:
General Motors today said it will purchase 200 million shares of GM common stock held by the U.S. Department of the Treasury for $5.5 billion, or $27.50 per share. The share buyback is part of the Treasury’s plan, also announced today, to fully exit its entire holdings of GM stock within 12 to 15 months, subject to market conditions.
(Excerpt) Read more at zerohedge.com ...
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The government wastes money terribly, I can give personal experience for this issue. They should privatize all government construction and maintenance, and this coming from someone who's family member was a civil servant.
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Workers at GM, Ford to Score Nice Bonuses This Year
Posted: December 21, 2012 at 2:08 pm
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Profit-sharing bonuses for United Auto Workers’ members at Ford Motor Co. (NYSE: F) and General Motors Co. (NYSE: GM) are expected to be at least as large as last year’s payout at General Motors and larger than the year-ago bonuses paid at Ford. Approximately 55,000 GM hourly workers and 40,000 Ford employees are in line for the payments.
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GM workers can expect bonuses of between $5,500 and $7,000, and Ford’s employees could receive a payment of more than $8,000 each, according to a report in The Wall Street Journal. The payments are based on a formula that gives workers a $1 bonus for every $1 million in North American operating profit at the two companies.
Read more: Workers at GM, Ford to Score Nice Bonuses This Year - 24/7 Wall St. http://247wallst.com/2012/12/21/workers-at-gm-ford-to-score-nice-bonuses-this-year/#ixzz2FkG2LPgI