FORTUNE -- I'm usually skeptical about what's going on, rather than rhapsodic. So it was a departure from form when I wrote six months ago that, confounding expectations, the government was going to come out way ahead on the $17.2 billion of taxpayer money that it spent to bail out Ally Financial, formerly GMAC, General Motors' finance subsidiary.
Now, it turns out, I was excessively optimistic. Oh, well. Yes, the Treasury is virtually certain to come out ahead if you include the $3.7 billion of dividends that it has collected from Ally. But contrary to what I wrote last summer, the government is unlikely to recover its full investment in Ally common stock.
At the time, I figured that Ally's book value -- its net worth per share -- would be about $10,000 after it settled claims arising from the bankruptcy of its Residential Capital mortgage subsidiary, its one-time crown jewel that filed for bankruptcy in 2012 and emerged from it last year.
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I figured that the government, which has been pushing for an initial public offering of Ally shares, would sell its Ally holdings at book value, or perhaps more.
As of Sept. 30, book was about $9,870 a share, close to what I figured it would be. But I wasn't counting on a November sale by Ally of $1.3 billion of new common stock in a private placement to an undisclosed investor group at only $6,000 a share. Ally needed the sale to pass a government stress test, which allowed it to get regulatory approval to redeem the $5.9 billion of 9% preferred stock that the Treasury owned.
Ally, which declined to comment, presumably wanted to get out from under that expensive dividend obligation and to clean up its balance sheet. The Treasury, which also declined to comment, presumably wanted to be able to tell the world that it had gotten its $5.9 billion back.
However, selling those new shares at $6,000 each reduced Ally's book value by about 5%, to about $9,330 a share. (You can find the math at the end of this post.)
Then came the second thing I hadn't expected. Rather than waiting for Ally to have an initial public offering, the Treasury did a private sale, raising $3 billion by selling Ally common at $7,375 a share. That's substantially more than Ally got in November. But it's more than 20% below Ally's diminished book value -- and I had been counting on sales at Ally's undiminished book value.
I think the government, which paid book value for a good piece of its Ally common stock, decided to take some chips off the table during the current bull market, rather than waiting to take Ally public and possibly having the market turn.
I wasn't counting on such a sale.
If you include dividends, Treasury has gotten back $15.3 billion of the $17.2 billion it put into Ally. At the price Treasury got earlier this month, the 571,971 shares of Ally shares it still holds would fetch about $4.2 billion. That's way more than the $1.9 billion the Treasury is still out of pocket -- but less than the $5.6 billion the Treasury has tied up in its remaining Ally common. The Treasury would have to get about $9,800 per Ally share for the Treasury to break even. That seems unlikely to happen.
I still think that we taxpayers have done amazingly well with Ally, all things considered. The government feared -- rightly, I think -- that if Ally had to file for bankruptcy in 2008, General Motors dealers would have been unable to finance new car purchases from GM, and that GM (GM) would have fallen into a chaotic bankruptcy.
Taxpayers will still come out well, when you price in the fact that bailing out Ally helped avoid huge damage to our industrial base. However, taxpayers are unlikely to come out as well as I predicted.
Even though I hedged in my original column by saying that, "(Ally's) stock could fetch less than its asset value per share," I owe you an explanation of where I went wrong. Now, you have it. And now, I'll return to my usual skepticism.
Here are the numbers that show how Ally's $1.3 billion stock sale in November reduced the book value of Ally's common stock by more than $500 a share.
Book value as of Sept. 30, 2013: about $13.136 billion
Shares outstanding: 1,330,970
Book value per share: about $9,870
In November, Ally sold 216,667 new shares at $6,000 each, raising $1.3 billion.
This made book value about $14.436 billion and increased the number of shares to 1,547,637. Divide the book value by the number of shares, and you get a book value of about $9,330.
Sources: Fortune calculations, from Ally public filings.
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