GM Suckers Update

Mickey Kaus Columnist
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GM Suckers Update: They sneered when kausfiles said GM was looking for “suckers” to buy its stock. They were not sneering all the way to the bank!  The stock has plummeted relative to the Dow and just dipped below $30. (The IPO price was $33.)  No way the taxpayers get their money back at this rate–for that to happen shares need to climb to around $50. And that’s under a conservative estimate of the government’s investment, one that ignores the tax … “spending.”  Sorry, Steve! … Underlying the decline: GM’s market share is not looking good. … P.S.: I’m thinking of leasing a Chevy Malibu myself: nice-looking car, supposedly handles well, OK reliability. And it’s not selling. Soon the dealers might be desperate. …

Update: GM stock dilution on the way? …

4/19 Update–The Biggest Sucker: The WSJ reports that the Obama Administration is still looking to dump the government’s remaining shares, even at a loss:

Government officials are willing to take the loss because the Obama administration would like to sever its last ties to the auto maker, the people familiar with the matter said. A summer sale makes it more likely Treasury could sell all of its stake in GM by year’s end, avoiding a potentially controversial sale in the 2012 presidential election year.

At today’s prices the taxpayers would lose “more than $11 billion,” according to the WSJ. That seems like a lot of money to kiss off if the quick sale is designed to help Obama’s reelection (as opposed to helping GM by removing the “Government Motors” hex). To make the loss easier sneak by taxpayers, we could change the way it is measured to make it appear smaller. I propose a new system of denomination, in which $11 billion = 1 Rattner Unit. … (This would replace an earlier proposal in which the Rattner Unit would equal $16.2 million.)

Mickey Kaus