General Motors recently announced that it bought back preferred stock from the UAW Retiree Medical Benefits Trust and the Canadian government. The deal closed in December of 2014 and supposedly will result in a reduction to GM’s fourth quarter earnings to the tune of $800 million. GM had the option to redeem the shares at face value after December 31st of 2014. The timing of the deal brings into question the motivation behind the move and also leads us to reexamine a previous preferred share buyback that occurred in late 2013.
The 2013 deal seemed to have been designed to benefit the UAW rather than the shareholders that GM has an obligation to serve. Reuters reported on the deal in September of 2013 with the following:
… Read More ➡General Motors Co (GM.N) said on Monday it would buy back just under half of its preferred shares held by the United Auto Workers