U.S. Needs to Sell GM Stake at $133.78 a Share to Break Even


The U.S. government would have to sell all its shares in General Motors at an average price of $133.78 a share in order to break even on its stake in the company.

That's $39.15 higher than the peak price of the old GM's shares, in 2000, during the peak of the boom in pick up trucks, The Wall Street Journal said.

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Neil Barofsky, special inspector general for the $700 billion spent on bailouts, named the $133.78 price in a letter to Republican Sen. Charles Grassley. The senator had asked Barofsky for an analysis on the forthcoming GM IPO and the government's chances of getting its money back.

The depressed auto market could make it difficult for the government to recoup its investment.

"If GM has good products in the pipeline and the market takes off, there would be a better chance," Stephen Spivey of Frost & Sullivan's Automotive & Transportation practice told The Wall Street Journal. "If you're betting today, the chances aren't great."

GM received $49.5 billion of taxpayer money to help it reorganize. The company has paid back $6.7 billion in cash, $2.1 billion was converted to preferred shares and $1 billion went to wind down the old company. The remaining $39.7 billion was converted into a 61% into the automaker.

These figures don't include interest and dividends.