"Not that that inconvenient truth has stopped anyone, of course. Per CNN, the government has given $19.4 billion to GM so far, and a further $30 billion will be charged to the ChinaCard to finance GM through the bankruptcy process. Call it a round $50 billion all told.
My understanding (and please correct me if I am wrong) of what is happening is that all of this money we've thrown at GM is being converted to equity; that is to say, GM doesn't owe the government anything, but the government will now own something like 70% of the company. So if we're to get our money back from this little project, that equity stake will have to be sold off. To get $50 billion out of that 70% implies an eventual valuation of Government Motors at $72 billion or so. The new Government Motors and the old General Motors aren't strictly comparable, but that is roughly equivalent to a General Motors stock price of $118/share (across an estimated 610.6 million shares outstanding). General Motors' peak stock price over the last five years has been less than half that - $46.93/share.
Anyone want to place a bet on a company jointly run by the federal government and the UAW being able to achieve results like that in the face of unfettered competition from the likes of Toyota, Honda, and Ford?" - Dorsai "Live Journal" entry on 06/01/2009