Sunday, December 25, 2011
GM Record Profit No Balm for Obama Nursing Loss on Shares: Cars
Bloomberg Businessweek reports:
General Motors Co., saved by the Obama administration with a $50 billion bailout, is making more money than it has in its history, adding jobs and gaining market share. It’s still a headache for Barack Obama.No word yet from Congressman John Dingell or his wife of GM fame on this story.
GM closed today at $20.50 a share, less than half the $53 price that the U.S. Treasury Department needs to break even. The shares fell on Dec. 19 to their lowest price since the Detroit- based automaker’s initial public offering in November 2010. The stock needs to rally almost 50 percent to reach $30 a share, the minimum price the Treasury Department would consider for a secondary offering, said three people familiar with the matter.
That puts Obama in a quandary. When Republicans nominate a candidate in August, the government will probably either still own a substantial portion of GM or will have sold the stock at a loss that could be more than $10 billion. Obama’s opponents can criticize him either way, said Dan Ikenson, an economist at the Cato Institute, a Washington think tank.
