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UPDATE: GM to Buy Back $5 Billion in Stock
General Motors Co. says it intends to maintain a $20 billion cash reserve to maintain its investment-grade status but will return all additional cash to shareholders.
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General Motors Co. says it intends to maintain a $20 billion cash reserve to maintain its investment-grade status but will return all additional cash to shareholders. The company is launching the program with a $5 billion stock buyback.
GM agreed to the move to avoid a possible proxy fight with investor Harry Wilson. Last month Wilson demanded that GM return $8 billion of its current $25 billion cash horde to shareholders. He has dropped an earlier plan to nominate himself for a set on GM's board.
The new stock buyback, coupled with a 20% dividend hike GM announced last week, is likely to cost the company about $10 billion by the end of next year. Investors liked the plan: GM's stock price closed on Monday at $37.66, up 3% to its highest price since last July.
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