Don't look for General Motors Co. to shed the nickname "Government Motors" anytime soon even though billionaire Warren Buffett has taken a serious liking to the stock.
Buffett's Berkshire Hathaway disclosed in a filing it bought $256.6 million in GM stock, 10 million shares. The U.S. Treasury still owns about 500 million shares three years after the $49.5 million bailout.
GM, which is selling Buicks and Chevys like rice cakes in China, may be posting nice profits four years after its bankruptcy, but the Treasury still owns a 26 percent stake in the company and is in no hurry to part with it.
"Our perspective is that the company had made real progress, but the market hasn't given them as much credit for that as it might," Assistant Treasury Secretary Tim Massad, who oversees what remains of the Troubled Asset Relief Program, said in an interview with The Detroit News.
The News said the government would lose more than $15 billion of its investment if it sold its shares in GM at current prices. GM stock, which closed at $21.18 on Friday, would have to sell for $53 a share for Treasury to break even.
Administration officials told the News Treasury will not sell any GM stock before the fall election.
"We have to balance maximizing recovery for the taxpayers with the speed of exit," said Massad.
GM cut back its presence on Facebook before the social media Web site's initial public offering last week, saying it would save the $10 million it spent on paid advertising on social media because the ads were not generating sales.
The Wall Street Journal said GM spent $10 million for ads on Facebook and $30 million more on its Facebook fan pages -- a drop in the bucket of GM's $4 billion annual advertising budget.
GM still spends more than $1.1 billion a year on television advertising and a mere $270 million on the Internet.
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