This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Deal: Canada Dumps $1B in GM Stock

THE DEAL (The Deal) -- Canada said late Tuesday it has sold approximately 30 million shares of General Motors (GM - Get Report) for about $1.1 billion, continuing the process by governments to exit the automaker four years after GM received a massive bailout. 

The Canadian Ministry of Finance office confirmed that Canada GEN Investment Corp. sold the shares, about 20% of its total holdings, to Bank of America Merrill Lynch (BAC) and RBC Capital Markets in an unregistered block trade.

Shares of GM closed at $37 apiece on Tuesday. 

The sale comes days after the U.S. Treasury Department disclosed it has sold about $811 million worth of GM stock in August. Post-sales, the U.S. owns about 186 million shares of the automaker and Canada GEN holds about 110 million common shares. 

Must Read: Linn Energy Discloses Progress On Berry Petroleum Merger Filing

The U.S. has said it hopes to exit its GM investment by early 2014, and Canadian officials in a statement Tuesday expressed a similar desire. 

"As we said from the start, our investment in GM was always meant to be temporary as we worked to maximize the return to Canadian taxpayers," Minister of Finance Jim Flaherty said. 

"The government of Canada is committed to exiting from ownership of GM as quickly as feasible," he added, "while maximizing the return for Canadian taxpayers, as we demonstrated today." 

The U.S., Canadian and Ontario governments received the shares in 2009 as part of a nearly $60 billion bailout and restructuring of the automaker, which otherwise would have run out of cash during the great recession. 

The U.S. government has recouped about $35.4 billion of the $50 billion it gave to GM during the financial crisis, but would need to sell its remaining stake for more than $75 per share to break even on the investment. Canada, meanwhile, has to sell its remaining shares at more than $50 apiece to be made whole. 

But the governments have argued that they believe the bailout was worth it even if the money is not fully recovered because of the number of jobs it preserved. GM in the years since the bailout has returned to profitability and in recent quarters has been expanding its North American manufacturing base. 

"The value of this investment can be seen in the jobs and companies saved and tax bases preserved," Flaherty said.

Written by Lou Whiteman.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
GM $31.80 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs