Posts Tagged ‘Auto bailout’

Will GM go bankrupt again?

August 24, 2012

That’s the question posed in a recent Forbes article that’s worth reading.

Here are some of the underlying facts … read the article for the editorial stuff …

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Stock Market

The federal government owns 500,000,000 shares of GM, or about 26% of the company.

The stock is trading at about $20/share, so the government is holding about $10 billion worth of stock

The government’s GM stock is worth about 39% less than it was when the company went public at $33 /share

Since GM’s IPO almost two years ago, the broader S&P 500 has gone up about 30%.

During that period, Ford shares have gone down about 15%, Toyota up about 15%, Honda up about 5%, Nissan up about 35%, Hyundai up about 60% and Volkswagen up about 85%.
Source

It would take about $53.00/share for the gov’t to break even on the bailout.

 

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Car Market

As a company, General Motors peaked in 1965, when it commanded 50.7% of the U.S. market, and made a stunning-for-the-time $2.1 billion dollars in after-tax profits.

In the 1960s, GM averaged a 48.3% share of the U.S. car and truck market.

For the first 7 months of 2012, their market share was 18.0%, down from 20.0% for the same period in 2011.

GM is flailing in the D-car segment (Malibu, Camry) which accountd for about 20% of the U.S. car market.

Recent (and forthcoming) versions of the Malibu score dead last in Car & Driver reviews.

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Uh-oh

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Tracking the progress at GM …

October 12, 2011

The U.S. Treasury aimed to sell more of its 26.5% stake in GM by August or September.

Then, the stock started tanking.

GM stock would need to hit $53 a share for the U.S government to break even on its $50 billion bailout of the auto maker.

At $30 a share, the U.S. would lose more than $10 billion on its $50 billion bailout of GM.

So far this year, GM stock is down about 40%

It was trading just over $22  this week,

Than makes the loss about $15 billion … but, who’s counting?

 

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