According to a monthly report to Congress this week, the U.S. Treasury sold $1.2 billion in GM stock in October — about 33 million shares — of its remaining 101 million shares of the Detroit-based automaker. It originally owned 500 million sharesWatch video
DETROIT, MI- The U.S. government may shed all of its ownership of General Motors Co. by the end of the year.
According to a monthly report to Congress this week, the U.S. Treasury sold $1.2 billion in GM stock in October — more than 30 million shares — of its remaining 101 million shares of the Detroit-based automaker.
Sterne Agee analyst Ray Young predicts the U.S. Treasury stake had been reduced to 63 million shares at the end of October and the selling has continued in November, suggesting the current ownership is closer to 50 million shares or about 3 percent of the total shares outstanding.
“We believe the exit will be complete by year-end, which, in our view, is a positive catalyst for the stock,” he said in a note.
On the government’s increased sell down, GM stock [NYSE: GM] closed Wednesday at $38.71 per share, up $1.78 from the opening bell. The Treasury originally owned nearly 61 percent of GM as part of the auto bailout, which forced GM and crosstown rival Chrysler through a government-backed bankruptcy.
In December, GM repurchased 200 million shares of GM common stock from the U.S. Treasury at a premium. At that time, Treasury also announced that it intended to sell its remaining 300 million shares into the market in an orderly fashion and fully exit its GM investment by March 2014, subject to market conditions.
GM, or "Government Motors" as some critics have called it, has continually been ridiculed due to the government ownership, which was the result of the auto industry bailout that began under President George W. Bush in 2008 and which was expanded by President Barack Obama in 2009.
And once the government completely exits GM, don't necessarily expect the ridicule to stop. As of Oct. 31, the Treasury had recovered approximately $37.2 billion of its $49.5 billion bailout of GM. Officials predict the government to lose about $10 billion, which remains far less than some first predicted.
Obama and Treasury officials have said the expected billions lost as part of the 2008-2009 automotive bailout was worth it to save the U.S. auto industry and more than a million jobs.
Michael Wayland covers the automotive industry for MLive. Email him at MWayland@mlive.com & follow him on Twitter @MikeWayland or Google+.