FORTUNE -- Crocuses and various other bulbs are popping up in my garden, a tangible sign that our brutal East Coast winter has finally ended. Something similar is sprouting on Wall Street, of all places: a tangible sign that taxpayers are finally going to get enough cash to turn a profit on Ally Financial, which had long seemed fated to cost the U.S. Treasury big bucks.
Sale of part of U.S Treasury's stake will yield the public a cash profit.
I'm talking about yesterday's announcement that the Treasury is planning to sell a chunk of its stake in Ally, formerly General Motors' (GM) finance subsidiary, to public investors in an initial public offering at a projected range of $25 to $28 a share.
At those prices, the Treasury's stake in Ally has an indicated value of $4.4 billion to $5.0 billion. That's far more than the $1.9 billion that Treasury is currently out of pocket on the $17.2 billion of taxpayer money that it shelled out, beginning in 2008, to keep Ally -- and thus GM's dealer network, and GM itself -- from collapsing during the financial crisis.
Even at the bottom projected range of the IPO -- the Treasury selling 95 million shares at $25 each -- taxpayers will be cash ahead on their investment.
This is my third swing at the topic of taxpayers' investment in Ally, but the first time that I can use tangible, projected sales prices rather than my own estimate of what Ally shares would fetch in an offering.
There's a profit for taxpayers despite the fact that the Treasury is now likely to realize less money from Ally's common stock than it paid for it. That's because the Treasury collected $3.7 billion of dividends on Ally preferred stock, some of which it ultimately sold and some of which it converted to Ally common stock.
But even though the Treasury is likely to realize a small loss on the stock, this is an amazing outcome compared to how things looked for Ally not long ago.
[Read Full Article: Billions of reasons for taxpayers to love Ally's IPO]