Here’s Why GM Is Making Investors,Treasury Really Happy
Happy Friday to General Motors Co. (NYSE:GM). The automaker’s shares on Friday topped its 2010 initial public offering price of $33 for the first time in more than two years. According to Bloomberg, “GM rose 3.4 percent to $33.49 at 12:05 p.m. New York time after touching $33.58. The shares peaked at $38.98 at the close on Jan. 7, 2011, less two months after its November 2010 IPO.”
This milestone share price is welcomed by both GM and the U.S. Treasury, who provided the automaker’s $49.5 billion bailout. As GM prepares to return to the Standard & Poor’s 500 Index, it also has plans to introduce about 20 new vehicles in the U.S. this year. Additionally, Reuters explains that “the run-up in the stock price could help Treasury … trim losses that will likely still total billions of dollars.” Nonetheless, Treasury officials still maintain that their goal was never to turn a profit on the GM shares but rather to save U.S. jobs.
As of April 1, the Treasury still held 241.7 million shares, but it reported in December that it would fully withdraw from its GM investments by April 2014. GM executives are looking forward as confidence in the Detroit-based automaker continues to rise, and it will soon be able to escape the GM “Government Motors” charge. They hope their improved image will help boost future sales, especially as they prepare to introduce their redesigned full-sized pickups.
And GM and the Treasury might not be the only winners Friday. Bloomberg highlights that this high share price might also help boost President Barack Obama support, as he made the decision to move forward with the 2009 bailout while Mitt Romney made it undeniably clear that he did not agree.