The sting of the GM bailout continues. From USA Today:
DETROIT (AP) – General Motors earned its largest profit ever in 2011, two years after it nearly collapsed into financial ruin.
By Jeff Roberson, APGood news, right?
The 103-year-old company (GM) made $7.6 billion in 2011, up 62% from 2010. Full-year revenue rose 11% to $105 billion.
At $53 a share, the federal government breaks even on the $50 billion it “loaned” GM, but at the current share price of approximately $30 (well below the $33 IPO price of last November, which raised around $20 billion), taxpayers would lose around $11 billion. [source - 4-19-11]Well, that was 10 months ago and with record profits, what is the value of GM stock now?
That's right... down $4. The share price would have to double for taxpayers to get their money back.
The way the deal with the Obama government was structured, old shareholders and bondholders got nothing. Unions got money in the bank.
A great company was saved, but everyone except the unions got screwed in the process. Sound familiar?