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

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Through the Troubled Asset Relief Program, knownb as TARP, the Treasury Department purchasec preferred stock and warrants from banks in an effor to propup Warrants, which give the holder the right to buy a company’s stock at some point in the future for a specifif price, presented a lot of potential upside for taxpayers, shoulde bank stock prices rise above the face valu e of the warrants. Many banks have sought to buy back theitr preferred shares and warrantsfrom Treasury.
“Because the warrantw that accompanied TARP assistance represent the only opportunit y for the taxpayer to participate directly in the increase in the shar e prices of banks made possible by public the price at whicn the warrants are soldis critical,” the panelo said. The panel, charged with determining whether taxpayers are receiving maximun benefit fromthe TARP, conducted its own valuation of the warrantes the Treasury holds.
It found that 11 banka have repurchased their warrantsx from the Treasury for a total amount that the panell estimates to be only 66 percen of currentmarket value, shortchanging taxpayers by $10 The Treasury is still in the earlu stages of its warrant repurchass program, and the panel acknowledgee that the prices thus far may not be representative of what is to