The U.S. Treasury Department may be winding down its ownership of General Motors Company (NYSE:GM), but if it sold all the shares it owns today, it would make back less than one-quarter of the $15.6 billion GM still owes the U.S. taxpayer from the 2009 Troubled Asset Relief Program.
Even if the Treasury continues to sell its remaining 101 million GM shares on price rises, the best the U.S. government can hope for is to recover a little more than the approximately $3.7 billion it would get at Wednesday’s price. The cost basis of the shares the government holds is $43.52. GM was trading at around $37 on Wednesday, near its 52-week high of $37.71.
Since GM went public three years ago, the stock has traded at between $19 and $39 a share. This means the agreed-upon cost basis when the loans were converted into stock was always too high. With more than 80 percent of the government's stock sold off since 2010, GM's stock price has never touched $40 a share and actually plummeted last summer to less than half of that.
The government has cut its ownership of GM from 13.8 percent in June to 7.3 percent as of the latest figure. The U.S. Treasury announced earlier this year that it would fully divest from GM by the first quarter of 2014.
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