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GM share sale won't be micromanaged by Treasury, department says

By Peter Whoriskey
When the U.S. Treasury begins selling off its stake in General Motors, it will not seek to allocate shares to specific buyers, but officials expect that no single investor or group of investors will receive "a disproportionate share," the department said today.

The guidelines for the sale, filed by the department this evening, appear to address concerns that a foreign company could buy up a majority of the automaker's shares.

The United States owns about 61 percent of General Motors after spending $50 billion to bail out the company. The U.S. government is now preparing to sell off those holdings.

"We expect that potential investors will be sought across multiple geographies with a focus on North American investors," the guidelines state.

As long as its guidelines are followed, the Treasury "will not involve itself in decisions regarding allocation of shares to specific buyers," and instead will leave the details of the sale up to GM and the underwriters of the sale.

The guidelines also address suggestions that the Treasury seek to sell its GM shares mainly to retail U.S. investors, rather than the large institutional investors such as mutual funds, hedge funds and pensions that typically buy up large stakes in public offerings.

"We expect that a large and diverse group of institutional investors will be offered an opportunity to participate," the guidelines published Friday say. "We expect that interested retail purchasers will be given ample opportunity to participate."

Including institutional investors will help the U.S. government gain a higher share price, and thus a larger return on its investment.

By Peter Whoriskey  | September 17, 2010; 5:59 PM ET
Categories:  Auto industry, U.S. Treasury  
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Posted by: Anonymous | September 17, 2010 7:40 PM | Report abuse

why do you say that?

Posted by: Anonymous | September 17, 2010 7:48 PM | Report abuse

The last time General Motors sold stock and bonds the value of the stock went to zero, and the bondholders got screwed out of all their money.

Posted by: screwjob21 | September 17, 2010 7:56 PM | Report abuse

GM will be bankrupt in two years...just watch. The union will make sure of that.
You notice that the government is not asking the union to sell its shares.

Posted by: staterighter | September 17, 2010 8:10 PM | Report abuse

So a year after the government screwed investors in GM, the same government is saying, "No seriously, invest in GM".

They must be counting on the "stupid" investor to prop this up. Sort of like the same person expecting "stupid" voters to vote him in again next time.

Posted by: Ombudsman1 | September 17, 2010 8:12 PM | Report abuse

GM only needs to sell 1 billion shares for $100 each. No problemo. That would, of course, surpass the market cap of things like Microsoft and Google. And with the terrific lineup of electric golfcarts, who could turn down such an offer. TAXPAYERS, you are about to MAKE MONEY on this socialist takeover! WOO HOO!

Posted by: Anonymous | September 17, 2010 9:30 PM | Report abuse

We taxpayers own 61% of GM; we should receive 61% of the stock prorated based on the amount of income tax we paid in 2008. It might turn out to be worthless, but I want my stock.

Posted by: Chippewa | September 17, 2010 9:31 PM | Report abuse

I hope my mutual fund company does not invest my money in this money losing scheme.

Posted by: Anonymous | September 17, 2010 10:19 PM | Report abuse

All the "experts" I read said to not buy Google at $80 a share.


Posted by: GaryEMasters | September 17, 2010 10:50 PM | Report abuse

GM admits they will have to give about $6 billion to their pension fund in both 2013 and 2014 and more after that: The GAO says "the 'new' GM pension funding is already in the hole by a whopping $26.3 billion." They have way more pensioners than employees, and their market share has dropped below where it was when they went bankrupt. Who is going to buy into this IPO?

Posted by: mikewkelley | September 18, 2010 1:27 PM | Report abuse

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