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Making Money on GM Investment

Posted By Barry Ritholtz On June 13, 2009 @ 1:22 pm In Bailouts | Comments Disabled

What are the odds that we are going to earn the bailout money back on GM ever?

Consider the math:

GM has received $50.7 billion in taxpayer money ($30.1 billion for DIP etc, $20.6 billion previous capital infusion). When Government Motors [1] comes out of bankruptcy,  Uncle Sam will own 60% of it.

At its all time high, GM’s market cap was $56 billion which slid down to ~$7.3 billion prior to chapter 11. (Symbol = GMGMQ.PK)

For the taxpayer to just break even on their investment , the New GM would have to have to reach a market capitalization of $84 billion — almost 150% of its all time peak. That will be tough, even with the new GM’s better capital structure, employee contracts, and much less debt . . .

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via What I learned [2]

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Previously:
Top 10 Things the Letters “GM” Stands For [1] (April 2nd, 2009)

http://www.ritholtz.com/blog/2009/04/top-10-things-the-letters-gm-stands-for/

Cisco, Travelers into the Dow [3] (June 1st, 2009)

http://www.ritholtz.com/blog/2009/06/cisco-travelers-into-the-dow/


Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2009/06/making-money-on-gm-investment/

URLs in this post:

[1] Government Motors: http://www.ritholtz.com/blog/2009/04/top-10-things-the-letters-gm-stands-for/

[2] What I learned: http://whatilearnd.com/post/119947605/gm-bankruptcy

[3] Cisco, Travelers into the Dow: http://www.ritholtz.com/blog/2009/06/cisco-travelers-into-the-dow/

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