US government would lose 16 billion if they sold GM shares

[Twiddly]

http://www.weeklystandard.com/blogs/...ut_646676.html

Interesting theory from Romney, saying they are only holding onto the shares to avoid a political embarasment. I admit that I am quite naive on this story, does he have any point at all, or just political posturing? I mean a 16 billion dollar loss is nothing to sneeze at, and I thought GM paid back all the bailout money? apparently not, if it was with this stock :P

[Naxere]

http://www.weeklystandard.com/blogs/...ut_646676.html

Interesting theory from Romney, saying they are only holding onto the shares to avoid a political embarasment. I admit that I am quite naive on this story, does he have any point at all, or just political posturing? I mean a 16 billion dollar loss is nothing to sneeze at, and I thought GM paid back all the bailout money? apparently not, if it was with this stock :P

As far as I'm aware, the shares would need to be sold at $51 per share for the US to break even. Right now the stock is at 21.25 per share and is showing no signs of recovering (chart below). It's either a) sell the shares at a loss now, b) wait it out and see if the price recovers, or c) wait it out and lose even more money.


http://www.investorguide.com/stock-charts.php?ticker=GM

[semaphore]

The US already sold more than half its shares so you can't base the whole calculation on current prices.

Also it is just nonsense, the government isn't selling now precisely because it'd be a loss. Not sure why anyone would think that selling low is a good idea.

[Bakis]

Just be glad those shares were not in Facebook stocks

[Naxere]

The US already sold more than half its shares so you can't base the whole calculation on current prices.

Also it is just nonsense, the government isn't selling now precisely because it'd be a loss. Not sure why anyone would think that selling low is a good idea.

Because it beats getting even less in return if it continues to tank? Ask anyone who bought Facebook stock.

[semaphore]

Because it beats getting even less in return if it continues to tank? Ask anyone who bought Facebook stock.

So by that logic I'm sure you thought selling Apple shares was a good idea in the late 1990s or 2001 too.

[Naxere]

So by that logic I'm sure you thought selling Apple shares was a good idea in the late 1990s or 2001 too.

Nobody can predict the future. I'm sure there were people that held on to Enron stock hoping it would bounce back that wished they hadn't.

[semaphore]

Nobody can predict the future. I'm sure there were people that held on to Enron stock hoping it would bounce back that wished they hadn't.

Don't need to predict the future to make smarter decisions than blindly following herd mentality on stock prices. Let's be honest here, are you really expecting to see GM go bankrupt again? Because to me GM is hardly comparable to Enron.

[Naxere]

No, I can't imagine they'll go bankrupt again. What would you propose to do, hold the stock forever? Do you honestly think the stock will rebound enough to get even close to the break even point? Based on what? Take into account that the highest the stock has gone is 38.75 back in January 2011. Sales of Honda/Toyota have increased 47.6% and 87.3% in the past year and while the US manufacturers have gone up as well, not nearly as well as those two. Source: http://online.wsj.com/mdc/public/pag...autosales.html

[Bakis]

http://projects.propublica.org/bailout/list This list is far more depressing than sitting on just 16 billion of a "loss" in GM shares.
Same can be said about all our countries, since most of us live in a country whos government has been forced to bail out banks and industries.

[Naxere]

http://projects.propublica.org/bailout/list This list is far more depressing than sitting on just 16 billion of a "loss" in GM shares.
Same can be said about all our countries, since most of us live in a country whos government has been forced to bail out banks and industries.

I agree, but that's another topic altogether.

[semaphore]

No, I can't imagine they'll go bankrupt again. What would you propose to do, hold the stock forever?

You do realise that there is a middle ground somewhere between "right now" and "forever", right? Taking to the extremes at every turn is the reason things are so screwed up.

Do you honestly think the stock will rebound enough to get even close to the break even point?

What about rebound a little to make the losses a few billions lower?

Based on what?

Based on the fact that GM stock prices were ar $19.7 in October 2011, and rebounded to $26.5 in November 2011, fell to $19 again in December, then climbed to $26 again in February 2012. The stock market is volatile, and it makes sense to wait when prices are low. Even just within this range of flucations that's still a pretty substantial sum of money to be saved. Not as convenient for political posturing, perhaps, but better for the nation.