Many of the "investments" the government made in big banks through the bailout have turned a profit. Will General Motors' coming initial public offering of stock have the same fate? In order to do so, the shares must sell for at least $134 each, according to special inspector general for the Troubled Assets Relief Program Neil M. Barofsky. Do taxpayers have any hope of breaking even?

Morningstar analyst David Whiston appears to think so. Peter Whoriskey of the Washington Post reports:

Last week, in fact, Morningstar analyst David Whiston issued a preliminary estimate setting the shares' fair value at $134.

"GM's cost structure is drastically improved," Whiston wrote in a Sept. 13 note to investors. "We think GM's earning potential is excellent because it finally has a healthy North American unit and can focus its marketing efforts on just four brands instead of eight. . . . We think it is critical for investors to know that GM now makes excellent car models as well as light trucks."

Though Whiston is definitely bullish on GM, is the rest of the market? After all, the U.S. will need to sell quite a sum at this price -- about $50 billion worth.

One obstacle the price is up against is its past stock performance. Looking at its historical chart from MarketWatch, the stock peaked at $82.81 in March 2000. (We're assuming here the IPO will not dilute the number of shares outstanding then.) If you adjust for inflation, then that high would still only compare to $105 per share in August 2010 dollars. So we're looking for about a 27% premium to hit $134.

But as Whiston notes, the company looks very different now, in ways that are good and bad -- but mostly good. First, its legacy costs are smaller. Second, it's a leaner company that appears to be designing better cars. But making itself a smaller company meant selling off or winding down several brands, such as Saab, Hummer, and Saturn. So it will have to bring in profits to sustain the growth necessary to justify the higher price with fewer product offerings.

For now, it's pretty hard to tell just how taxpayers will fare. It would be quite a feat for the government to get its entire investment back. But if the price is even anywhere in the ballpark of the $134 figure, then taxpayers would fare a lot better than the pessimists had imagined.

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