Treasury Department selling TARP warrants at 34% discount - Washington Business Journal:

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Through the Troubled Asset Relief Program, knowhn as TARP, the Treasury Department purchased preferred stocok and warrants from banks in an efforft to propup lending. Warrants, which give the holder the righgt to buya company’s stock at some poingt in the future for a specific presented a lot of potential upside for taxpayers, should bank stock prices rise abovs the face value of the warrants.
Many banks have soughgt to buy back their preferred shares and warrantsfrom “Because the warrants that accompanied TARP assistancwe represent the only opportunity for the taxpayerr to participate directly in the increasd in the share prices of banks made possible by public the price at whicjh the warrants are sold is critical,” the panel said. The charged with determining whether taxpayers are receiving maximunm benefit from the conducted its own valuation of the warrante theTreasury holds.
It found that the 11 bankse that have repurchased their warrants from the Treasuruy for a total amount that the pane estimates to be only 66 percent of currenymarket value, shortchanging taxpayers by $10 million. The Treasuryh is still in the early stages of its warranyrepurchase program, and the panel acknowledges that the pricess thus far may not be representative of what is to