DETROIT — The U.S. government would have to sell its General Motors stock for $133.78 a share to recoup the nearly $50 billion it spent bailing out the Detroit automaker, according to a watchdog of government bailout funds.
Neil Barofsky, the special inspector general for the $700 billion bailout of the financial industry and automakers, revealed the figure in an Aug. 30 letter to Sen. Charles Grassley, R-Iowa. The letter was obtained by the Associated Press on Wednesday.
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.
The government won't sell the 304 million common shares it owns all at once. The Treasury Department and GM's new CEO have said it may take a couple of years and several "follow-on" sales for the government to recoup its investment. Also, analysts say the share price could start out low to help fuel demand. The hope is that GM's share price would rise as the company's car sales and finances improve.
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.