General Motors Co., whose shares were held by millions of Americans before it went into bankruptcy, is returning to stock markets. The company has outlined a rough plan for how it will sell shares to the public, and how its biggest owners -- including the U.S. government -- will sell their investments. GM hasn't set a date, but the sale could come as early as October.
Here's an explanation of the plan, what it means, and what led to it:
WHAT GM'S SELLING
Preferred stock to the public. GM will spend the money it gets on any part of the business it wants. Preferred shares generally pay dividends.
WHAT GM'S OWNERS ARE SELLING
Common stock to the public, which will reduce their ownership stakes in the company. The U.S. government owns 61 percent of the automaker; the Canadian government owns 11.6 percent; a trust fund that pays the health care costs of retired auto workers owns 17.6 percent; and GM bondholders own 10 percent.
AFTER THE SALE
When these owners sell common stock they'll be transferring part of their stakes in GM to buyers of the common stock. Holders of such stock are the owners of every public company. They can exercise control by electing a board of directors and voting on corporate policy.
The government loaned GM $50 billion so it could stay in business last year. GM has repaid $6.7 billion. That leaves $43.3 billion, which the government has turned into a 61 percent ownership stake in the company.
HOW TO BREAK EVEN
Once GM goes public, its shares would have to trade on the New York Stock Exchange at a price that would value all GM shares at $70 billion for the government's 61 percent stake to be worth $43.3 billion. If the government then sold all its shares at that price, taxpayers would break even on the original loan of $50 billion, which was given to GM in chunks in 2008 and 2009.