Taxpayers Will Still Lose Money On GM IPO

General Motor’s stock went on sale in late November for about $33 a share. In exchange for 61% of General Motor’s stock, the government supplied GM with $40 billion bailout cash bringing the old American automobile company back to life. In order for the government to make back tax payers cash, it needs to sell its stock at $44 per share. Though it plans to hang on to 35% ownership of GM. The U.S. government has hopes to sell the remainder of its stake at over $44, assuming GM’s stock will rise. Realistically, in order for this to happen GM has to be worth as much as $56 billion like it once was earlier in 2000.
Given the American car industry’s track record, I highly doubt that GM will ever see the glory days again. The U.S. economy is still very fragile and people aren’t willing to invest in cars that have bad track records despite GM’s recent reform.