U.S. Taxpayers Likely to Lose Billions of Dollars on GM Bailout.

U.S. Taxpayers Likely to Lose Billions of Dollars on GM Bailout.(DN).The Obama administration said Wednesday it will sell 200 million shares — or 40 percent of its remaining stake in General Motors Co. — back to the automaker and announced plans to completely exit the Detroit automaker by March 2014.
The Detroit automaker said it will purchase 200 million shares of GM stock held by Treasury for $5.5 billion — or $27.50 per share — nearly $2 above the stock’s closing price on Tuesday.
GM shares jumped sharply on the news and were up 7.5 percent to $27.36, or $1.90, early afternoon in very heavy trading.
The exit timetable signals the end of one of the most extraordinary government interventions in the U.S. economy in history — the rescue and partial nationalization of two U.S. automakers and their finance arms supported by two U.S. presidents.
Still, taxpayers will almost certainly lose billions of dollars in the $49.5 billion GM bailout – and the government would need to sell its remaining shares for about $70 each to break even. If the government sold the rest of its stock at current prices, taxpayers would lose more than $13 billion. But profits from the bank and AIG bailouts will largely offset the auto bailout losses.
David Whiston, a senior equity analyst for Morningstar, said he was surprised the government didn't wait for a $33 a share price, but said investors likely were expecting an announcement following the quick AIG sale.
The Canadian federal and Ontario governments — which gave GM a separate $10 billion bailout — still hold about 9 percent of GM's shares. Canadian officials said in Toronto they have no immediate plans to sell.
The Treasury has said it expects to lose $24.3 billion on the $85 billion auto bailout.
Treasury also holds a 74 percent stake in Ally Financial Inc., the Detroit-based auto lender, as part of a $17.2 billion bailout.
Last year, the government exited Chrysler Group LLC and booked a $1.3 billion loss on its $12.5 billion bailout.Hmmmm.....Obama: "All the Choices We've Made Have Been the Right Ones" Read the full story here.