The TARP Is Lifting: Government Motors No More, In About A Year Or So

It has been repeatedly suggested that GM should use its ample profits to buy back the shares held by the U.S. government (don't forget the Canadians.). Finally, GM listens to reasons. Or, possibly, strong suggestions from Washington. GM will purchase 200 million shares of GM common stock held by the U.S. Department of the Treasury for $5.5 billion, or $27.50 per share, the company said in a statement  The share buyback is part of the Treasury's plan, also announced today, to fully exit its entire holdings of GM stock within 12 to 15 months, subject to market conditions. Stock buyback plans usually lift the price of the share. Promptly, GM shares were up some 8 percent to 27.57 at the open. After the buyback, Treasury will still own a stake of about 19 percent, down from about 26 percent currently. Treasury said it will sell its remaining stake of about 300.1 million shares "through various means in an orderly fashion" over the next 12 months to 15 months, and could begin the process as soon as January. That could bring the price down again. According to Reuters, Treasury has agreed to relinquish certain governance rights, including required levels of U.S. manufacturing and barring the purchase of corporate jets. Senior executive payment caps under TARP remain in place. Once Uncle Sam is completely out of the picture, it will be bonus time at RenCen. The Canadians remained unmentioned in the declarations of impending independence. Canadian Finance Minister Jim Flaherty told Reuters that his government has no immediate plans to sell its stake in General Motors. Not now, maybe later. Oh well, maybe Government Motors a little longer. from The Truth About Cars http://www.thetruthaboutcars.com

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