New Fox News piece: GM's Bailout Is a Financial Disaster

My newest piece starts this way:

Only the government would consider it a success to buy stock at $43.84 a share and sell it at $33. -- But President Obama and those who supported his bailout of General Motors and Chrysler are claiming just that today.
First, the alternative to the government bailout wasn't to "give up" as Obama claimed on Thursday at his press conference. Bankruptcy didn't mean that all jobs were going to be lost. It didn't mean that all the factories producing cars would be closed.
Yet, the president made that claim in his announcement again today and he continually misstates what would have happened in a normal bankruptcy. Courts don't just close down bankrupt companies. In fact, that rarely occurs. Any part of a company that can continue operating profitably continues to do so.
Some are pointing out that just a year and a half ago GM stock was trading at just $1 a share and claim that today's closing price of $34.19 is proof of the bailout's success. It simply doesn't account for the over $50 billion in direct bailout funds and the tens of billions of dollars in other breaks President Obama gave the company and its unions.
It also ignores . . . .

Note: I should have itemized more of these other tens of billions of dollars in gifts to GM. For example, GM won't have to pay $45.4 billion in taxes on future profits.

The $45.4 billion in future tax savings consist of $18.9 billion in carry-forwards based on past losses, according to GM's pre-IPO public disclosure. The other tax savings are related to costs such as pensions and other post-retirement benefits, and property, plants and equipment. . . .

Another take on how much the remaining government stock would have to sell for.

At $30 a share for the IPO, the stock would have to rise 67% to about $50 for the U.S. government to break even on the $50 billion it spent to bailout the auto maker.

Typically, when underwriters price an IPO, they are hoping it will rise 15% to 20% on its first day of trading, indicating that at an offering price of $30, the stock could rise to $34.50 to $36.

From the $35 level, the stock would have to rise another 41% for the Treasury to breakeven on paper. A $30 share price also would raise the profile of the IPO.

At that price, the offering would raise $14 billion — or $15.6 billion with the overallotment option — making it the sixth biggest IPO globally and second biggest in the U.S. on record, according to Thomson Reuters. . . .

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