Obama: GM stock sale a success story

[Nonno]

"President Barack Obama on Thursday celebrated the return of a reborn General Motors to the U.S. stock market, saying it shows some of the "tough decisions that we made" during the financial crisis were beginning to pay off.

"American taxpayers are now positioned to recover more than my administration invested in GM, and that's a good thing," Obama said.

The government's $50 billion taxpayer-backed rescue of the venerable automaker includes more than $36 billion injected by the Obama administration and more than $13 billion approved by Obama's predecessor, President George W. Bush.

Trading the new stock is a milestone for both the corporation and for the Obama administration.

The stock rose sharply at first, rising to nearly $36 per share from the $33 price GM set for the initial public offering before pulling back and closing at $34.19.

The trading — more than 400 million GM shares traded hands during its debut on the Big Board — helped reduce the federal government's stake in the company from 61 percent to about 36 percent."

Full article here.

 

[Lenny]

"President Barack Obama on Thursday celebrated the return of a reborn General Motors to the U.S. stock market, saying it shows some of the "tough decisions that we made" during the financial crisis were beginning to pay off.

"American taxpayers are now positioned to recover more than my administration invested in GM, and that's a good thing," Obama said.

The government's $50 billion taxpayer-backed rescue of the venerable automaker includes more than $36 billion injected by the Obama administration and more than $13 billion approved by Obama's predecessor, President George W. Bush.

Trading the new stock is a milestone for both the corporation and for the Obama administration.

The stock rose sharply at first, rising to nearly $36 per share from the $33 price GM set for the initial public offering before pulling back and closing at $34.19.

The trading — more than 400 million GM shares traded hands during its debut on the Big Board — helped reduce the federal government's stake in the company from 61 percent to about 36 percent."

Full article here.

Guess you missed the part by which impartial economists figure the American people are still in the hole over the GM buyout until these stocks reach $51. That is expected to take about five years. That means THE WON is wrong, once again and you look like an ass (once again).

 

[aps45819]

"President Barack Obama on Thursday celebrated the return of a reborn General Motors to the U.S. stock market, saying

He also said his health care bill would save money

 

[ImnoMensa]

He also said his health care bill would save money

I don't know much about stock.

The people who owned GM stock before the bail out lost everything. They didn't get a penny back on their money. Now people are buying GM stock?

I guess a fool and his money are soon parted.

 

[aps45819]

I don't know much about stock.

The people who owned GM stock before the bail out lost everything. They didn't get a penny back on their money. Now people are buying GM stock?

I guess a fool and his money are soon parted.

Only certain progressive investment firms were allowed to buy the stock
Not just anyone can buy GM stock - The Pueblo Chieftain: Local

 

[Gilligan]

I don't know much about stock.

The people who owned GM stock before the bail out lost everything. They didn't get a penny back on their money. Now people are buying GM stock?

I guess a fool and his money are soon parted.

I know that the share price of the very profitable Ford Motor Co. is about half of what the GM IPO went for. I find that quite puzzling. I have to to think that the investors that bought GM at such a high price did so because they see it as almost as secure as a treasury bond..a government-backed investment and hence low risk.

Hmm..lots of analysts are really down on GM. From Weidner over at the WSJ:

General Motors, as iconic an American brand as there is, hasn't made consistent profits in more than a decade. The breakdowns have been numerous. It has never gotten into gear, shifting CEO to CEO whose steering was suspect. The company has taken on too many passengers with the unions, the taxpayers and Wall Street interests.

A new coat of paint can't cover up the rust.

So I'm not crazy...any celebration by Obama or Geithner is very much premature.

 

[MMDad]

I don't know much about stock.

The people who owned GM stock before the bail out lost everything. They didn't get a penny back on their money. Now people are buying GM stock?

I guess a fool and his money are soon parted.

I had about $5,000 of GM. I ended up getting $250 for it.

 

[Aerogal]

Well, hope you got your write off, 'bout all I can say.:shrug:

 

[Tilted]

I know that the share price of the very profitable Ford Motor Co. is about half of what the GM IPO went for. I find that quite puzzling. I have to to think that the investors that bought GM at such a high price did so because they see it as almost as secure as a treasury bond..a government-backed investment and hence low risk.

Hmm..lots of analysts are really down on GM. From Weidner over at the WSJ:



So I'm not crazy...any celebration by Obama or Geithner is very much premature.

The current market cap of Ford and that of GM at the IPO price are pretty close, with Ford's actually being a little higher. At yesterday's close, Ford's MC was a bit over $56 Billion. At $33 a share, GM's MC would be $49.5 Billion. (Yesterday's close at over $34, and the effect of Motor Liquidation Company's warrants for 273 million more common shares, exercisable at an average price of $14.16, would put GM's stock valuation at close to $57 Billion as far as I'm concerned.)

The value seen in GM comes, in large part, from its cleaner balance sheet (in so far as debt goes). It got to wipe a lot of debt out of existence through he bankruptcy process, something that Ford didn't get to do. Ford still has a fair bit of debt to deal with and still needs to divert significant portions of its operating profits going forward to debt reduction. It may or may not be in better shape on an ongoing operations basis, and better positioned in the marketplace, but GM is getting to start from a better fiscal position, so to speak.

It's recent bankruptcy notwithstanding, I think GM is a relatively safe investment in the short term. Will it cripple itself and eventually crash fiscally again? It might. But, it's got a big head start on that possibility right now - at the very least, it will take a while for those old woes to catch up to it.

For what it's worth, I still own a little Ford (leftover, 'free' stock that I have from when I was trading the bailout conversation), and I don't plan to, nor do I think I could ever bring myself to, buy GM. That said, this was a pretty hot IPO - a lot of big investors were anxious to own some of the new GM.

 

[bcp]

Funny isnt it?
I remember Bush holding off on bailing out GM in September before the elections, I remember the liberals crying about how Bush was going to let so many people become unemployed because of not bailing out GM.
Then Bush signed the papers and GM got its bailout, He also said that GM would have to have an outlined recovery plan.

I then remember the liberals crying that Bush bailed out GM and was just paying off corporations at the expense of the taxpayer.

then obama released some more bailout money to GM and re-instituted the demand that GM come up with a recovery plan.
The liberals were happy.

Now that it looks like GM might have begun to turn around, the liberals are trying to give obama all the credit, when in fact it was Bush, and his original requirements that set the recovery in motion.

 

[BOP]

He also said his health care bill would save money

He also said our taxes would not go up.

 

[Gilligan]

He also said our taxes would not go up.

And he said that Gitmo would be closed by now.

 

[BOP]

List of Obama's Lies | Barack Obama Lies

Lies During First Year
I do solemnly swear (or affirm) that I will faithfully execute the Office of President of the United States, and will to the best of my ability, preserve, protect and defend the Constitution of the United States.
Obama Inaugaration. 20 Jan 2009

 

[ImnoMensa]

I had about $5,000 of GM. I ended up getting $250 for it.

How can screwing you out of $4,750.00 and then turning around and selling that $4750 .00 worth of stock to someone else be called anything but theft.

People who owned GM stock should have been made whole before any stock was allowed to be sold.

Was the GM bailout a success???
It was

If you consider stealing and getting away with it a success.

Like I said , I don't know anything about stock, but I know right from wrong, and selling GM stock without making those who got screwed whole is wrong.
I would like to add that there is no guarantee that those who buy in now will not get the same shaft that Obama so delicately shoved into you.

 

[Tilted]

How can screwing you out of $4,750.00 and then turning around and selling that $4750 .00 worth of stock to someone else be called anything but theft.

People who owned GM stock should have been made whole before any stock was allowed to be sold.

Was the GM bailout a success???
It was

If you consider stealing and getting away with it a success.

Like I said , I don't know anything about stock, but I know right from wrong, and selling GM stock without making those who got screwed whole is wrong.
I would like to add that there is no guarantee that those who buy in now will not get the same shaft that Obama so delicately shoved into you.

The stockholders weren't the ones that got screwed (not by the bankruptcy, anyway - maybe by how GM was operated over the years or by bad investment advice), the non-UAW and non-parts supplier creditors were. If you own something that isn't worth anything you might not get anything for it, the reality that at some point in the past it was worth something, or perceived to be worth something, notwithstanding. If you pay money for your ownership of it, and it later becomes worthless (or worth less), then you might lose money. That's business and that's investing. As an owner, you have downside risk as well as upside potential.

If the bankruptcy process worked as you suggest it should have in this case, we'd have a mess even worse than what we have now. Businesses (and people, I suppose, if non-corporate bankruptcy also worked that way) could spend money and buy stuff and take chances and, if they found themselves too heavy in debt, just declare bankruptcy and screw their creditors, and then keep on chugging (with the benefit of the money they had borrowed and without needing to pay it back). Debt obligations wouldn't mean anything, you could just erase them whenever you want. At least as it is, the owners generally have to lose their ownership interest (or the potential debt-cleaned-value there of) in order for the ongoing concern to continue to exist. Owners are supposed to lose what they once had in order for the corporation to get to clean itself through bankruptcy. That's the disincentive to just saying F U to the creditors - the owners don't get to keep what they had. Should homeowners get to declare bankruptcy and discharge all their debt - the mortgage, credit card bills, car payments, boat payments - and still get to keep the house, the furniture and jewelry, the car, and the boat?

While I wish MMDad hadn't lost whatever value he lost with regard to GM stock, that value was lost over a period of time as GM ran a fiscally unsound, inefficient business (even if the gradual loss hadn't been accurately reflected in the stock price over the years because the investment community was unrealistic about the reality of the situation). That loss wasn't caused by the bankruptcy or the government's involvement there in. The same things that caused that loss were the things that ultimately caused the bankruptcy itself.

Bankruptcy isn't and shouldn't be about making owners 'whole', it is (to a large degree) and should be about making creditors as 'whole' as possible. It's not always completely about that, and in the GM and especially Chrysler situations it seemed not to be about that, much more so than usual, with regard to some of the creditors. That was the problem with it - not that owners lost out. They're supposed to. What they owned didn't have a positive value.

The idea of making owners whole in light of a bankruptcy is about as 'let's-bailout-everyone-and-cover-everyone's-asses-and-protect-them-from-the-mistakes-they-make' as you can get. If that's what we did, our economic system would just shut down - nobody would be able to borrow money because loaning money to people would just be giving them a license to (legally) steal it.

 

[awpitt]

I had about $5,000 of GM. I ended up getting $250 for it.

At what point was it worth $5K?

At what point was it worth $250?

My guess is that the drop in value occured before the "bailout".

 

[NCalif]

Obama Lies 7 Times In Under 2 Minutes

 

[MMDad]

While I wish MMDad hadn't lost whatever value he lost with regard to GM stock, that value was lost over a period of time as GM ran a fiscally unsound, inefficient business (even if the gradual loss hadn't been accurately reflected in the stock price over the years because the investment community was unrealistic about the reality of the situation). That loss wasn't caused by the bankruptcy or the government's involvement there in. The same things that caused that loss were the things that ultimately caused the bankruptcy itself.

I bought 500 shares when GM was at about $10. The real loss happened when all of GM's assets became part of the "new" GM and my shares only owned "Motors Liquidation Company." I believed that I would still own stock in the new GM, but when I learned the truth my stocks were worth $0.50 per share.

Here's how I equate this: I'm a bank. I make a risky loan, believing that if the worst happens I will still own the house. The buyer defaults. The government says "we can't have you homeless, here's the property next door." The buyer packs up all of his stuff, then the government takes apart the house board by board, brick by brick and reassembles it in the lot next door. They take the Rent-a-Center (bond holders) 60" LED TV and give it to the UAW. The government then cuts down all the trees and sells them to UAW for firewood. Then they remove all of the soil and sell it for fill. I am left with a leaky septic tank. Rent-a-Center and I sue. The judge agrees that wasn't right, but it's too late now, learning experience.

Then the government charges me to plow the road so that the buyer can still get out and take his 10 kids to school. A year later the Government comes along talking about how great the whole transaction went because five of the ten kids are still in school, one is on the way to possibly getting a GED, and only four are in jail, but the guy has paid back half of the expense of moving the house to the next lot, which is a net win for everyone involved.

If anyone other than the government tried to pull off this scam they'd be sitting in a cell next to Madoff.

 

[MMDad]

At what point was it worth $5K?

At what point was it worth $250?

My guess is that the drop in value occured before the "bailout".

Your guess would be wrong.

I fully accept that I gambled. I assumed that a stock at 33% of it's five year average and 11% of it's ten year peak had a good chance of eventually making me some money. I was willing to hold the stock for 20 years, so I wasn't looking for a quick buck. I had no idea that the government would come along and take it away and give it to the UAW while charging me for doing so.

It turns out that if I had taken that $5000 to a casino and put it into slot machines I would still $4500 or more. Even the Powerball tickets would have been a better investment.

 

[JoeRider]

Guess you missed the part by which impartial economists figure the American people are still in the hole over the GM buyout until these stocks reach $51. That is expected to take about five years. That means THE WON is wrong, once again and you look like an ass (once again).

It also missed the point that GM is still in a good position to fail since they were not able to clean the dead weight out of the company like if it had went in to bankruptcy.

The Plane is still going to crash unless the load is lightened.