Should the US Sell GM Right Now?

United States of GM
United States of GM

Executives at General Motors are urging the United States Treasury department to sell its remaining shares of the once (and probably still) fledgling US automaker. The reason? Because GM claims that the restrictions (like executive pay) are making it difficult for the auto-giant to attract quality talent for its high ranking management staff. If the government were to sell its share today, with the current share price, the government would lose a total of $15 billion. For the US government to break even on the bailout, the share price would have to climb to $50 a share, more than double the current price. With a P/E of only 8.5, $50 is not an entirely laughable target, but can GM reach that target without removing the executive pay restrictions? I actually think so, and I also think it is quite ballsy of GM to even ask the government to sell its shares right now at a cost of $15 billion to the taxpayers.

I suppose at the same time, this guy at Forbes predicts GM will be bankrupt in a years time, so perhaps it is a good time to sell..