GM Failing....Again?

At the moment, the federal government owns half of a million shares of GM, about 26% of the company.  It would need to get about $53.00/share for these to break even on the bailout, but the stock closed recently at $20.21/share.  This leaves the government holding $10.1 billion worth of stock, and sitting on an unrealized loss of $16.4 billion.

Additionally, the government’s GM stock is worth about 39% less than it was on November 17, 2010, when the company went public at $33.00/share.  However, since that time, the Dow Jones Industrial Average has risen by almost 20%, so GM shares have lost 49% of their value relative to the Dow.

Such poor performance may push GM to the brink of bankruptcy once again, with outcries for yet another bailout, which does no more for GM than ordinary bankruptcy proceedings could provide, while encouraging poor performance and diverting scarce public funds from other needed services.