Government's break-even price for GM: $133.78 - PowerStrokeNation : Ford Powerstroke Diesel Forum
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post #1 of 23 (permalink) Old 09-23-2010, 12:27 PM Thread Starter
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Government's break-even price for GM: $133.78

Government's break-even price for GM: $133.78 - Business - Autos - msnbc.com

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The U.S. government would have to sell its General Motors stock for $133.78 per share to recoup the nearly $50 billion it spent bailing out the Detroit automaker, according to a watchdog of government bailout funds.
Quote:
GM repaid the government $6.7 billion. The remaining money was converted to a 61 percent ownership stake in GM plus $2.1 billion worth of preferred stock. The government plans to start selling its shares as part of a GM initial public stock offering that is tentatively scheduled for mid-November.
I guess if they keep saying it long enough people will believe it.

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To reach Barofsky's per-share number, GM shares would have to sell for $40 above the automaker's peak stock price, which was nearly $93 in April of 2000, according to the Center for Research in Security Prices at the University of Chicago. That year was a good one for GM. It made $4.45 billion mainly by selling high-profit pickups and sport utility vehicles.
$40 above the peak price???

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post #2 of 23 (permalink) Old 09-23-2010, 12:47 PM
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Re: Government's break-even price for GM: $133.78

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....nor does it include the government's preferred shares, Barofsky wrote.


.

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post #3 of 23 (permalink) Old 09-23-2010, 01:00 PM Thread Starter
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Re: Government's break-even price for GM: $133.78

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The $133.78 figure does not cover any legal and investment banking fees for the IPO, nor does it include the government's preferred shares, Barofsky wrote.
How much preferred stock do we own?

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post #4 of 23 (permalink) Old 09-23-2010, 01:07 PM
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Re: Government's break-even price for GM: $133.78

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How much preferred stock do we own?
In the article it said $2.1 Billion, but I can't figure out how they came to that number............... if the stock doesn't have a price yet.

The other thing that is not calculated, is how much additional tax revenue the federal coffers have received from the company, its workers and all of the affiliates it supports.

Which wouldn't have been there........... if GM had just closed its doors.

As life proves once again.........it's not all black and white.

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post #5 of 23 (permalink) Old 09-23-2010, 01:27 PM Thread Starter
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Re: Government's break-even price for GM: $133.78

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In the article it said $2.1 Billion, but I can't figure out how they came to that number............... if the stock doesn't have a price yet.

The other thing that is not calculated, is how much additional tax revenue the federal coffers have received from the company, its workers and all of the affiliates it supports.

Which wouldn't have been there........... if GM had just closed its doors.

As life proves once again.........it's not all black and white.

.
GM wouldn't have closed its doors....there is too much revenue at stake. Someone would have purchased them for pennys on the dollar or they woudl have gone through bankruptcy like any normal company does.

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post #6 of 23 (permalink) Old 09-23-2010, 01:36 PM
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Re: Government's break-even price for GM: $133.78

We don't know that for sure.

Even at pennies on the dollar, the legacy costs were staggering.

Before anyone would have purchased them, the government would have had to step in and take responsibility for it.

And then.........we would have had no chance of recouping any money.

.

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post #7 of 23 (permalink) Old 09-23-2010, 01:43 PM
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Re: Government's break-even price for GM: $133.78

How are we supposed to afford these people's benefit plans? We have no money.

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post #8 of 23 (permalink) Old 09-23-2010, 01:54 PM
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Re: Government's break-even price for GM: $133.78

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How are we supposed to afford these people's benefit plans? We have no money.
Normally, it would be through the Pension Benefit Guaranty Corporation.

PBGC

Quote:
PBGC is a federal corporation created by the Employee Retirement Income Security Act of 1974. It currently protects the pensions of more than 44 million American workers and retirees in more than 29,000 private single-employer and multiemployer defined benefit pension plans. PBGC receives no funds from general tax revenues. Operations are financed by insurance premiums set by Congress and paid by sponsors of defined benefit plans, investment income, assets from pension plans trusteed by PBGC, and recoveries from the companies formerly responsible for the plans.
But, a GM sale would most likely have forced us to pick up the tab before it could have been sold.

Or the assets liquidated............... to pay the pensioners.

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post #9 of 23 (permalink) Old 09-23-2010, 02:01 PM
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Re: Government's break-even price for GM: $133.78

Why would a potential purchaser require the pensioners to be removed before a sale?

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post #10 of 23 (permalink) Old 09-23-2010, 02:15 PM
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Re: Government's break-even price for GM: $133.78

I think the more important question is.......... why wouldn't they?

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Never have so many politicians, screwed so many Americans...just to make one black person lose his job.
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