By on September 15, 2014

Ally at NYSE

Ally Financial, the lending artist formerly known as GMAC Financial, inches closer to freedom from government ownership as the United States Treasury begins a second trading plan to shed its shares.

Automotive News reports the plan would allow the U.S. Treasury “to continue exiting the investment in a manner that balances speed of exit with maximizing the taxpayer’s return,” according to CFO Charmian Uy.

The first plan saw the Treasury sell 8.9 million shares for $218.7 million in ROI for taxpayers, adding to the $18 billion recovered since the department first took majority ownership at the beginning of the Great Recession six years ago.

At the time, $17.2 billion was given to the floundering lender via the Troubled Asset Relief Program to prevent falling into the same abyss that took Lehman Brothers, Washington Mutual and a number of small banks, giving the Treasury 74 percent of the shares then available. Currently, it holds just 13.8 percent — or 66.2 million shares — of Ally common stock, all of which may be sold by the end of 2014.

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10 Comments on “US Treasury Begins Second Divestiture Plan Of Ally Stock...”

  • avatar
    Big Al from Oz

    How much has the Dow Jones risen since 2008? It has tripled.

    “Printing” money has caused this. Lots of money sloshing around trying to find an asset.

    How much is Ally really worth, say in a few years?

    But, how good are these assets? Are they worth the paper they are printed on?

    Who will eventually be left holding the debt when the “asset” prices slide?

    The future is interesting indeed.

    • 0 avatar
      jim brewer

      Looks like we made 8 to 1 on our money. I could use some of that illusory gain myself….

    • 0 avatar

      “How much has the Dow Jones risen since 2008? It has tripled.”

      Not exactly, it was at 7,063 at its nadir at the end of 2008/early 2009 so it has a bit more than doubled but not tripled; that would be crazy over the top with a 21,000 DOW. The DOW has been driven by large corporations, essentially not hiring (there is a lot of corporate distrust of all things Fed right now), controlling the expense side and thusly driving up their EPS and stock price. Those with something to invest are watching the numbers, buying in, probably too late, and fueling the fire as well. Sure there is some “irrational exuberance” going on and that will come to bear at some point, it always does but that’s the cyclical nature of the stock market. Printing money, however=inflation and that just isn’t happening.

      Agreed, there is no telling what kind of a snake basket Ally’s assets are so the faster the treasury unloads, the better for the taxpayer I would imagine. As for shareholder acquisition of the IPO, it’s buyer beware.

  • avatar

    You fail to remind us that Ally’s major owner besides the US government is Cerberus, you know, the group that bought Chrysler Corp, and was allowed to keep Chrysler Financial through the bankruptcy of Chrysler.
    Cerberus was able to sell Chrysler Financial for $7 billion, same as it bought Chrysler for, and get off the hook for the money owed the US taxpayers for the Chrysler bailout.

    The US government again is protecting Cerberus’s investments by babysitting Ally on the taxpayer dime.

    • 0 avatar

      I learned only recently that Cerberus is the owner of Albertson’s food stores.

      • 0 avatar

        If you are really interested and dig a little deeper, you will find that Cerberus is into a lot of investments. Does the name Dan Quayle ring a bell?

        The US government made Cerberus whole by bailing out not only GM and Chrysler, but also collateral business entities of the US auto industry furnishing their support, the US banking industry, the Mortgage lenders and Investment banks, etc.

        I know that Shrub started all that based on advice received from Hank Paulson, but the next administration just took it to the max.

        Books, papers and articles have been written on this, espousing at least three different perspectives and interpretations of “The Facts” as some of our B&B “experts” like to refer to them, each depending on whether they were on the receiving side, the giving side, or the side with the innocent by-standers watching all this waste, fraud and abuse happening in their beloved America.

  • avatar

    My sister’s name is Ally, and seeing her name in purple always makes me annoyed that it’s a bank name.

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