Continuing its divestment of the shares it obtained in General Motors for bailing out the automaker in 2009, the United States Treasury told Congress yesterday that it has sold $876.9 million dollars worth of GM stock last month, somewhere between 23 and 26 million shares, based on the trading prices during July. By those calculations, the U.S. government still holds about 136 million shares of GM, which closed yesterday at $35.98. At the rate that Treasury is selling off its GM shares, the government’s equity will be completely divested by early 2014. The government originally held a 61% stake in GM following the $49.5 billion bailout, over 500 million shares. By selling some of those shares, Treasury has recouped $34.6 billion of the $49.5 billion.
Also yesterday, the UAW’s health care trust finalized it’s sale of 45.4 million warrants that allow the holder to buy GM stock at a price of $42.31 before the end of 2015. The warrants were sold for $171 milion. According to the Detroit News’ David Shepardson, they were sold in a “modified Dutch auction” and can now be purchased on the open market. Shepardson told TTAC that large institutional investors were the likely buyers. At the offered price of $3.85 per warrent, GM stock would have to rise over $12 a share from its current price for it to be profitable should the purchasers exercise their rights. Since the UAW had no problem selling the warrants, it stands to reason that at least some of those large investors think that GM, or buying the warrants, which can be traded, is a good bet.