Republican presidential candidate Mitt Romney

Romney would sell GM stock quickly if elected

The government “bailout loans” have been a hot topic of conversation for Republican presidential candidate Mitt Romney and in a recent interview with The Detroit News, Romney stated that if he is elected President of the United State of America later this year – he will move quickly to sell off the government’s portion of General Motors stock.

Those who criticize the government bailout loans made to General Motors are still unhappy about the fact the US Federal Government is holding onto the 500 million shares of common stock so Romney’s angle of a quick sell is likely to appeal to those voters who oppose the government’s involvement with the suggestion of selling quickly. The problem is that when the 500 million shares of stock were issued as repayment of the bailout loans, those shares were valued at $33 per share but GM stock closed at $21.25 today. This means that if the government sold these 500 million shares at current prices, the government would effectively lose $5.875 billion US dollars strictly from the quick sale of the stock at the current price. This does not take into account the original amount of the bailout loans but all said and done – the quick sale of the 500 million shares of GM stock held by the US Treasury Department would end up costing the US taxpayers around $16 billion dollars.

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Comments

Expect the stock to tank if that happens. Too much supply will force lower prices for buyers to come in. Smart traders sell on the way up into strength, not on the way down. Then again, a business man is not necessarily a good trader. While I understand the Romney position, the investment is still a taxpayer entity; thus a loss here is a loss to us the taxpayers.
So.. they way it's shaping up this November, we'll have a choice between a guy whose never had a real job, who can't seem to tell the truth about anything, and whose cabinet is full of Wall Street insiders and a guy whose fortune was made buying companies in trouble, stripping them of anything of value, and then selling off what was left. We're doomed.
but then we the tax payers are stuck paying back the 16 billion gm refuses to payback

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