When GM went public, it gave tons of its stock to the US Treasury as part of the bailout payments. Now GM has announced that it plans to buy back some 200 million shares of that stock, reducing the treasury to 19-percent stake in the company.
There has been much talk about the current price of GM’s stock options and how much the US will lose if it sells at current rates. To help battle this GM has agreed to pay 27.50 per share, about an 8-percent boost over trading rate. The 200 million share sale is expected to be completed before the year end.
The Treasury is currently moving on a plan to divest all shares of GM stock in the next year and a half. After this transaction the US will still own around 300 million shares of GM stock. Small buybacks are scheduled to begin as early as next month.
