Taxpayers likely to lose money on the GM IPO

The government will apparently own part of GM for three more years. These guys don't seem to understand how prices work. The current price is the future expected price of the stock. The government might hope that future stock prices will rise, but they are losing money on the current sale and that means that future prices will have to rise by enough to make up those losses. As to the claim that the Obama administration is selling off the stock as quickly as possible, that is false. If they wanted to, they would sell it off all at once. Doing that would also help the stock price as political meddling with business decisions is surely helping to depress the stock.

The U.S. government is likely to take a loss on General Motors Co [GM.UL] in the first offering of the automaker's stock, six people familiar with preparations for the landmark IPO said.

Subsequent offerings of the government's holdings may be profitable depending on how investors trade the newly listed stock, the sources said.

But the question of whether taxpayers are ultimately made whole on GM's $50 billion bailout could be left open for years, the people said.

It could take more than three years for the Treasury to sell down its remaining stake in GM after the IPO, one person said. That would push a final accounting into the next presidential term. . . .

The Obama administration has pledged to exit its investment in GM as quickly as possible while holding out the prospect that taxpayers could ultimately be paid back in full. . . .