{"id":13595,"date":"2010-11-11T11:12:53","date_gmt":"2010-11-11T18:12:53","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=13595"},"modified":"2010-11-11T11:12:53","modified_gmt":"2010-11-11T18:12:53","slug":"new-math-or-an-old-game","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/13595\/new-math-or-an-old-game\/","title":{"rendered":"New Math… or An Old Game?"},"content":{"rendered":"

General Motors is preparing a public stock offering…\u00a0you know, because it’s primarily owned by the government and unions\u00a0right now.\u00a0\u00a0\u00a0 The sale is expected to raise $10.6 billion, most of which is\u00a0going to\u00a0the government\u00a0against the $50 billion bailout last year.\u00a0 Since government<\/em> is literally\u00a0us<\/em> (I mean, the $50 billion didn’t come from some savings account the Fed has\u00a0from working nights and weekends as a pizza delivery boy, right?), that means we<\/em> are selling an asset we<\/em> purchased with bail out money… back to ourselves<\/em>… and then putting the money we took from our left pocket into our right and claiming to have paid ourselves<\/em> back.\u00a0\u00a0Not sure, but I think there’s a nice big dollop of irony in there somewhere.\u00a0<\/p>\n

This is all well and good so far as socialist, potato-passing goes.\u00a0 I’m sure I’m not alone when I say that, while I don’t speak<\/em> political gobbley-gook, I understand it just fine.<\/p>\n

What bothers me here is the math.\u00a0\u00a0 The plan is to sell about 365 million shares at between $26 and $29 each, raising an estimated $10.6 billion.\u00a0 This will value the company at around $48 billion which, surprise, surprise, is Ford’s capitalization.\u00a0 As a matter of fact, if the shares sell near the high end of the range, GM’s capitalization will be closer to $60 billion – which means bigger and, ostensibly,\u00a0better than Ford.\u00a0 (Side note: Ford saw the problems ahead of time, made the difficult choices, accepted no public welfare, didn’t forever alter the bond market and our basic understanding of risk\/reward investing, came through the worst economic times the auto industry had ever seen and recently reported record profits… but they’re market capitalization is the same as or less<\/em> than GM’s? I suppose that’s the price you pay for actually thinking the rules of the market place should apply to everyone equally.\u00a0 Makes one wonder though, how happy Ford’s stock holders would be – and how much money they might be spending right now\u00a0– if Ford’s efforts had been properly rewarded in the free market and they were not in competition with the US Government.)<\/p>\n

Back to the math.\u00a0 Most of this\u00a0($10 Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

General Motors is preparing a public stock offering…\u00a0you know, because it’s primarily owned by the government and unions\u00a0right now.\u00a0\u00a0\u00a0 The sale is expected to raise $10.6 billion, most of which is\u00a0going to\u00a0the government\u00a0against the $50 billion bailout last year.\u00a0 Since government is literally\u00a0us (I mean, the $50 billion didn’t come from some savings account the […]<\/p>\n","protected":false},"author":36,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[251],"tags":[],"class_list":{"0":"post-13595","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-big-mother","8":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":10254,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/10254\/goldman-sachs-and-gods-work\/","url_meta":{"origin":13595,"position":0},"title":"Goldman Sachs and God’s Work","author":"Sean Purcell","date":"November 9, 2009","format":false,"excerpt":"I guess I haven't reached that point in my life yet when I'm so jaded (or is it cynical) that nothing will surprise me.\u00a0 I say this after reading an interesting little article in the London TimesOnline.\u00a0 They had the chance to interview Lloyd Blankfein, the Chairman and CEO of\u2026","rel":"","context":"In "Big Mother"","block_context":{"text":"Big Mother","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/big-mother\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":6950,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/6950\/the-bad-news-obamas-housing-relief-plan-is-a-giveaway-to-lenders-not-homeowners-the-worse-news-it-wont-work-anyway\/","url_meta":{"origin":13595,"position":1},"title":"The bad news: Obama’s housing relief plan is a giveaway to lenders, not homeowners. 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Maybe it\u2019s because I\u2019m so young! Any way, it\u2019s time for our \u201cMortgage Market Week in Review.\u201d We\u2019re going to focus on a couple of main topics for today: Jobs - the ADP report came out on\u2026","rel":"","context":"In "General"","block_context":{"text":"General","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/general\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":5804,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/5804\/citis-so-nice-i-bought-it-twice-a-tin-foil-hat-production\/","url_meta":{"origin":13595,"position":3},"title":"Citi’s So Nice I Bought It Twice (a Tin Foil Hat production)","author":"Sean Purcell","date":"November 24, 2008","format":false,"excerpt":"Alright, let's see if I got this straight: Less than 4 weeks ago Citi was purchasing Wachovia in a deal brokered by the FDIC. Less than 3 weeks ago the Fed injected $25 billion into Citi Less than 1 week ago Citi's shares tumbled Yesterday the Fed injected ANOTHER $20\u2026","rel":"","context":"In "Real Estate"","block_context":{"text":"Real Estate","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/real-estate\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":18066,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/18066\/overnight-news-if-what-derek-chauvin-got-is-justice-how-much-of-it-will-you-be-having\/","url_meta":{"origin":13595,"position":4},"title":"Overnight News: If what Derek Chauvin got is justice, how much of it will you be\u00a0having?","author":"Greg Swann","date":"April 21, 2021","format":false,"excerpt":"I'm going to offer up a quote from Andrew Branca, from before the sequestration of the jury, to show you how Derek Chauvin was railroaded, regardless of your opinions of the case: Frankly, at this point it\u2019s absolutely apparent that Derek Chauvin can receive nothing like a fair trial in\u2026","rel":"","context":"In "Group Therapy"","block_context":{"text":"Group Therapy","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/group-therapy\/"},"img":{"alt_text":"Ya think it's easy?","src":"https:\/\/i0.wp.com\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-content\/uploads\/2020\/08\/BHBNewTopImage-300x225.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":4259,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/4259\/how-we-got-to-this-place\/","url_meta":{"origin":13595,"position":5},"title":"How we got to this place…..","author":"Tom Vanderwell","date":"September 7, 2008","format":false,"excerpt":"I promise I won't take up so much space on here after the dust settles, but I'm having a hard time getting my mind around the enormity of what's happening with Fannie and Freddie and what it means, so I figure the best thing I can do is share what\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/13595","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/36"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=13595"}],"version-history":[{"count":4,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/13595\/revisions"}],"predecessor-version":[{"id":13599,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/13595\/revisions\/13599"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=13595"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=13595"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=13595"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}