GM’s Getting This Prize From the Government
General Motors (NYSE:GM) is poised to rejoin the Standard & Poor’s 500 Index on Thursday after the close of trading, and The Treasury Department celebrated Wednesday by announcing that it will begin another round of sales of the company’s stock that it acquired as part of the financial bailout known as the Troubled Asset Relief Program.
The news reflects another step in the right direction for GM who has been making many headlines in the last month with its optimistic news. Previously snubbed, “Government Motors,” GM’s shares rose above its initial public offering price for the first time since 2010 in May, and the Treasury has reported continued sales of its stock as it accelerates its exit from the automaker.
The Treasury’s next public offering will mark an additional selling of 30 million shares as the company rejoins the S&P 500. The Treasury still owns 18 percent of shares of GM common stock, but it expects to finish its exit by the first quarter of 2014.
In the last public update by the Treasury, the government had sold 58.4 million shares of its remaining 300 million share stake through April 11.
GM’s return to the S&P 500 reflects a major victory for both the company and the government. Taxpayers invested about $50 billion in GM under the Troubled Asset Relief Program, and President Obama came under fire from Republican challenger Mitt Romney during the 2012 presidential election who criticized Obama’s $49.5 billion bailout in 2009. Since then, GM has ignored the criticism and vowed to buy back 200 million shares from the U.S. Treasury.
The government sold part of its GM stake in a 2010 initial public offering, and GM bought back another portion of sales earlier this year. Following the government’s announcement in January that it would sell all of its remaining holdings by the beginning of 2014, GM’s re-inclusion into the S&P 500 Thursday marks just another company milestone.
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