General Motors is hoping to emerge from bankruptcy conduct an initial public offering sometime in 2010, according (subscription required) to The Wall Street Journal. The IPO could either raise additional capital for the company or allow the United States and Canadian governments to begin divesting their stakes in the company.
Washington has been mum on how and when it plans to begin recouping its "investment" in General Motors. Earlier this week on DailyFinance, Peter Cohan wrote that our investment in GM has mostly gone down the tubes:
"On June 2, a day after it filed for bankruptcy, I estimated that the new General Motors would have to reach a value 20 percent above its all time high in order to repay the $50 billion government loan it received to keep it from having to liquidate. A month later, The Washington Post is out with a similar analysis, which agrees almost to the penny with my estimate. My conclusion then was that reaching this value is unlikely and that our money is mostly gone."
That could make it tough for Washington to begin unloading its stake in GM. The industry and lawmakers in Washington have long insisted that the investment in GM will be repaid, and unloading the stake and locking in losses would be an admission that those optimistic promises were nothing more than lies designed to railroad through a policy that most Americans found intuitively offensive.
Selling the stake in GM will be difficult for political reasons -- but holding on might be even tougher. It will be fascinating to watch Washington try to sort this mess out.
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Reader Comments (Page 1 of 1)
7-02-2009 @ 8:25PM
ij70 said...
lol
7-03-2009 @ 1:35AM
jd said...
GM: The mark of crap.
7-03-2009 @ 7:44AM
nologs said...
don't blame GM blame the people that buy forigen junk
7-03-2009 @ 10:33AM
LARRY said...
ANYONE WHO IS CRAZY ENOUGH TO BUY THE GM (GOVT MOTORS) IPO SHOULD BE SENT TO A MENTAL INSTITUTION. THE GOVT KNOWS NOTHING ABOUT CAR PRODUCTION BUT THEY DO KNOW HOW TO SPEND TAXPAYER MONEY==============================
7-03-2009 @ 10:51AM
Oldtimer said...
Pump and dump!
7-04-2009 @ 9:56PM
BarkingGhost said...
nologs, why should people stop buying foreign junk in favor of American junk?
7-07-2009 @ 11:14PM
Doug said...
Does anyone know if you own GM stock now, and they have a new IPO what happens to your exsisting shares of the stock?