U.S. Treasury Plans To Sell 30 Million Shares Of General Motors Company (GM)
According to The New York Times, the Treasury Department reported today that they are planning to sell 30 million shares of General Motors Company (NYSE:GM). This news comes on the heels that General Motors is going to be reinserted into the Standard & Poor’s 500-stock index. In the past, the Treasury Department made it clear that they were going to sell their 300 million shares of GM (around 18% of the company) by early 2014. The Treasury Department said that they will sell the shares through predefined written trading plans.
The Treasury Department attained the shares when they provided General Motors with a $49.5 billion bailout in 2009. This past December, the Treasury Department sold 200 million shares of GM for $5.5 billion. After that sale, General Motors was left with 300 million shares. The Retiree Medical Benefits Trust division of the United Automobile Workers union will also participate in the offering by selling 20 million shares.
Earlier this week, the S&P announced that General Motors is going to be replacing H.J. Heinz in the stock index starting tomorrow. Berkshire Hathaway and 3G Capital acquired Heinz as part of a deal to take the company private. GM was a member of the S&P 500 since it was started in 1957. When GM filed for bankruptcy in 2009, they were removed from the S&P 500.
GM’s stock is expected to rise when the news is confirmed that the auto company has been added to the S&P 500 again. When GM went public in November 2010, they had an offering price of $33 and now the company is trading at about $34.10. The Treasury Department is working with JPMorgan Chase, Morgan Stanley, and Citigroup as the joint book-running managers for the proposed offering.This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at +AmitChowdhry