Treasury Department sells TARP warrants at big discount - Baltimore Business Journal:

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Through the TARP, the Treasury Departmentf bought preferred stock and warrantes from banks to propup Warrants, which give the holder the right to buy a company’s stoclk at some point in the future for a specific price, presented a lot of potential upsidde for taxpayers, should bank stock prices rise above the face valuew of the warrants. Many banks have sought to buy back their preferreed shares and warrantsfrom Treasury.
“Becausw the warrants that accompanied TARP assistanc e represent the only opportunity for the taxpayer to participat directly in the increase in the share pricesz of banks made possible bypublic money, the pricre at which the warrants are sold is the panel said. The panel, chargesd with determining whether taxpayers are receiving maximun benefit fromthe TARP, conductesd its own valuation of the warrant s the Treasury holds. It found that the 11 banks that have repurchaserd their warrants from the Treasury for a totalk amount that the panel estimates to be 66 percentt of currentmarket value, shortchanging taxpayers by $10 million.
The Treasurgy is still in the early stages of its warranytrepurchase program, and the panel acknowledges that the prices thus far may not be representativr of what is to come.