The Detroit News - General Motors Co. Chairman and CEO Dan Akerson bought 10,000 shares in the Detroit automaker on Tuesday with his personal funds — a sign of his faith in the company's long-term prospects, the company disclosed Wednesday.
The automaker said the purchase was on the first day that company insiders could buy shares after GM announced $2.5 billion in second-quarter profits. The purchase also coincided with a GM investor conference, but Akerson didn't disclose the purchase Tuesday during the portion of the conference that reporters could listen to.
This is Akerson's latest personal purchase since GM's initial public stock offering in November.
GM spokeswoman Renee Rashid-Merem said Akerson's purchase reflected his outlook.
"He clearly sees the company is going in the right direction, and he's demonstrated that through his personal action," she said.
But Akerson's investment hasn't paid off yet. He acquired the new shares at $25.05.
GM — and the broader markets — sank Wednesday, and GM closed at $23.92, down 6.3 percent. On paper, Akerson lost $11,300 on his new shares. Wednesday's close was GM's lowest since going public. The company went public at $33 in November and closed after its first trading day at $34.19. It's off 30 percent since then.
Akerson holds 103,600 GM shares in total. His GM stake fell by $167,800 on paper Wednesday, compared with Tuesday's closing price of $25.54.
Akerson is paid an annual salary of $9 million in cash, stock and long-term incentive pay.
Separately, Timothy Lee, a GM vice president and president of international operations, bought 500 shares on Tuesday.
GM insiders — those with access to non-public earnings material — can buy stock through the end of month, under the current window.
GM's steep stock fall is likely to significantly delay the government's exit from the company.
The government currently holds 500 million shares — or a 26 percent stake in GM. At current prices, the government could lose $14 billion on its $49.5 billion bailout.
