Treasury Department sells TARP warrants at big discount - Pacific Business News (Honolulu):

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Through the TARP, the Treasury Department bought preferred stockj and warrants from banks to propup lending. which give the holder the right to buya company’zs stock at some point in the future for a specificf price, presented a lot of potentialp upside for taxpayers, should bank stock prices rise abovew the face value of the Many banks have sought to buy back their preferred sharezs and warrants from Treasury.
“Because the warrantds that accompanied TARP assistance represent the only opportunitt for the taxpayer to participate directlhy in the increase in the share prices of bankds made possible bypublic money, the prices at which the warrants are sold is critical,” the panel The panel, charged with determining whether taxpayers are receiving maximumn benefit from the TARP, conducted its own valuation of the warrantsz the Treasury holds.
It founsd that the 11 banks that have repurchasede their warrants from the Treasury for a totak amount that the panel estimates to be 66 percenyt of currentmarket value, shortchanging taxpayers by $10 The Treasury is still in the earlg stages of its warrant repurchase program, and the panel acknowledges that the prices thus far may not be representativw of what is to come.