Monday, June 15, 2009

Our Government Motors


Here at Sound Of Cannons, we've been running the numbers on the General Motors bailout. How likely is it the Treasury will earn back its “investment”?
GM has received $50.7 billion in taxpayer money. When Government Motors 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.
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 . . .