Wednesday, November 24, 2010
Associated Press
WASHINGTON
The Treasury Department says it has received $11.7 billion from the sale of 358.5 million shares of General Motors stock.
Treasury announced that the net proceeds from the GM stock sold last week were delivered Tuesday. Treasury officials said that the government could receive an additional $1.8 billion assuming the bankers exercise options to purchase an additional 53.8 million shares of GM common stock within 30 days of the initial stock offering.
The government put $49.5 billion into GM as part of its bailout of the giant automaker.
In addition, Treasury said it will receive an additional $2.1 billion from GM when the automaker repurchases preferred stock that was issued under the government’s $700 billion Troubled Asset Relief Program. That sale is supposed to take place in December.
The $11.7 billion in net proceeds represented the amount the government received after subtracting fees paid to the banks that handled the initial public offering.
In the IPO, GM’s owners — mainly the U.S. government — sold 478 million shares at $33 each.
The stock traded as high as $35.99 on the first day of trading last Thursday before settling with a gain of 3.6 percent at $34.19 for the day.
On Tuesday, GM shares followed the broader stock market down to close at $33.25, off 83 cents, or 2.4 percent, from Monday’s close.
Such volatility is normal for stock in the days after an initial public offering, especially one the size of GM’s, said Scott Sweet, managing partner of IPO research firm IPO Boutique. The conflict between North and South Korea, he said, is causing jitters in all segments of the stock market in a light trading week due to the Thanksgiving holiday, he said.