Citigroup, Inc. (NYSE:C) And JPMorgan Chase & Co. (NYSE:JPM) To Manage General Motors Company (NYSE:GM) Shares
Northern, WI 1/18/2013 (gdpwatch) – The US Treasury Department finalized the Citigroup, Inc. (NYSE:C) and JPMorgan Chase & Co. (NYSE:JPM) will manage the sale of shares of General Motors Company (NYSE:GM), to free itself from the world’s biggest automaker because of its $50 billion bailout since 2009. The department sold 200 million shares to General Motors, Detroit for $6 billion in December, and kept 300 million with it. It is planning to sell off 19 percent of its remaining stake within 15 months. According to the department’s documents, the banks are ought to get 1 cent per share as a commission on the sale of the shares.
This is a good news for its investors because they were tired of the government’s influence on it. The price of the share dropped by 23 percent after the initial public offer in Nov.2010. The General Motors has announced to introduce 13 new models this year to increase its share value in the market. After this the share value increased by 21 percent last year.
Both the banks can make additional money through bid-ask spreads and building relationship with clients.
Kip Weissman said that both the banks would be able to sell shares to the interested customers at a good price. And simultaneously the customers can use the banks for their own different purposes too.
The bailouts have actually shown 10 percent growth in the light vehicle industry for consecutive 3 years. General Motors had got $50 billion for its restructuring.
The treasury had sold its last 235 million shares of American International Group Inc (AIG), underlining that it’s the end of the rescue, when it took AIG four years back to save the global economy. Because of this the US profit on AIG went up to $23 billion.
The treasury’s troubled asset relief program had bailed out companies like AIG, General Motors Company (NYSE:GM) and Citigroup Inc. This will cost the taxpayers $24 billion less than the estimated $ 107 billion by the Congressional Budget Office. The department estimated that the cost of bailing out General Motors Company (NYSE:GM), Ally Finance Inc (ALLY) and Chrysler to taxpayers will be $24 billion and it said it will update the details every quarter.
There was a total sale of 15 million cars and light trucks in the US in 2012, which is the best and biggest since 1984. The 18 analysts from Bloomberg with an average estimated the industry sales at 15 million in2013.
General Motors Company (NYSE:GM) increased sales by 4 percent last year making 3 million. But its growth wasn’t went down by 18 percent, the lowest in 88 years. CEO, Dan Akerson, states that it’s a product sale which starts and ends with the product. He said they are expecting modest gains this financial year in both domestic and international markets.
Shares of General Motors Company (NYSE:GM) is at $29.49
Shares of Citigroup, Inc. (NYSE:C) is at $41.24
Shares of JPMorgan Chase & Co. (NYSE:JPM) is at $46.44