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GM Gives Employees An Opportunity To Buy Stock At IPO

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On: Wed, Oct 13, 2010 at 1:01PM | By: Sherry Christiansen


GM Gives Employees An Opportunity To Buy Stock At IPO

GM announced that the company is planning to offer hourly and salaried employees as well as retirees in Canada and the U.S. an opportunity to purchase stock at in “the direct share program” as part of the initial public offering scheduled for November of this year.

The Detroit automaker sent a letter, dated September 30th, to each of its 600,000 employees and retirees inviting them to “pre-register” their intentions regarding the stock share purchase program offered online, by October 15th. Direct share programs are commonly offered as a way for employees to take advantage of stock options offered by their employers.

The maximum number of shares that an employee qualifies to purchase under the program has not yet been established by General Motors, but the minimum investment must be at least $1,000, according to the letter, which was acquired by Automotive News today.

The share price has not yet been set for GM’s initial public offering, and no official details regarding the letter have been released, according to GM spokesman Pete Ternes, because of government regulations regarding the impending IPO.

Many financial analysts are predicting that this could possibly be one of the most significant IPOs in recent history, with GM hoping to make up to $8-$10 billion to pay toward the total $49.5 billion that the company is in debt from last year’s government bailout.

Currently the United States government owns as much as 61% of General Motors, the Canadian Government controls another 11.7%, and an independent health care trust owns 17.5%, leaving very little stock proceeds to the Detroit automaker.

According to Auto News.com: “Ternes said GM has received some feedback from employees and retirees that they had not received the letter as of today. He said the company would communicate to employees if an extension is allowed.”




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