General Motors Corporation (GM) taking another leg lower, slipping more than 4 percent to $33 per share. Weakness may be related to a Detroit News report that states the Obama administration wants to quickly exit GM stake, rather than trying to maximize returns to the taxpayers.
According to the DET News, Austan Goolsbee, a top economic adviser to President Obama and chairman of the Council of Economic Advisers, said the government wouldn’t wait to maximize taxpayer returns on its remaining 33% stake in GM.
“The writing is clearly on the wall that the government is getting out of the GM position,” Goolsbee told reporters at a breakfast sponsored by the Christian Science Monitor. “The government never wanted to be in the business of being majority shareholder of GM. It was only to prevent a wider spillover, negative event on the economy. So we’re trying to get out of that.”
Last year, the U.S. Treasury reduced its stake from 61% to 33% during GM’s IPO and at current prices would lose about $7 billion of its $49.5 billion GM bailout. For the government to break even, it would have to sell its remaining shares at around $53 each.
GM lost $1.55, or 4.48%, to $33.04 at 1:04 E.T. in New York Stock Exchange trading.