Login to your account
Not a member? Register now.

Subscribe To The Blog:

Follow Us

The Latest News And Reviews
Throughout The Car Industry

GM Begins Trading Today With Biggest IPO In U.S. History

Comments: Leave | View
On: Thu, Nov 18, 2010 at 2:01PM | By: Sherry Christiansen

GM Begins Trading Today With Biggest IPO In U.S. History

General Motors is going through a historical turning point as the Detroit automaker’s stock rises sharply, and the automaker returns to its status as a publicly traded company. GM’s Chief Executive, Dan Akerson, revved the engine of a Camaro at the opening of trading today on the New York Stock Exchange to “mark the occasion,” according to Bloomberg News. The stock jumped from its initial IPO price of $33 to $35.80 shortly after Akerson rang the opening bell, or to be more literal, the opening “growl.”

Today’s trading marks an incredible milestone for GM after filing for bankruptcy 16 months ago, when GM accepted a $50 billion government bailout. The U.S. government will reduce its stake in GM from 61% to 26% as part of today’s public offering.

Trading volume was extreme as over 154 million GM shares exchanged hands by 10:08 a.m. Thursday morning, November 18th. "It's exciting," Akerson told CNBC. "If it closes up higher (on the day) I'll be happy."

In order for the government to get all of its bailout money back, stocks would need to rise to $50 per share, which according to analysts could take a couple of years.

On Wednesday President Obama stated that not only does the IPO mark a major milestone in GM’s history, but also for the U.S. auto industry as a whole. Obama stated: "Supporting the American auto industry required tough decisions and shared sacrifices, but it helped save jobs, rescue an industry at the heart of America's manufacturing sector, and make it more competitive for the future."

Yesterday preferred shares were offered to investment firms to the tune of $15.8 billion at $33 per share, which may boost the total IPO to $23.1 billion—the biggest IPO of common stock in U.S. history.

Agricultural Bank of China purchased $22.1 billion giving the Beijing-based bank and other institutional investors most of the new stock.

General Motors did set aside 5% of its new stock for employees, retirees, and car dealers to purchase at the offering price. No information has been released yet regarding how many of those individuals actually signed up for the offer.

SAIC Motor Corp., GM’s partner in China, purchased nearly a 1% stake in GM shares, for a total cost of approximately $500 million.

An anonymous spokesman for the government stated that the remaining government shares would not be sold outside the IPO for 6 months after the sale, and that the options for selling would be evaluated at a later date.

According to Jack Ablin, Chief Investment Officer at Harris Private Bank (which oversees $55 billion of the stock funds), stated: “The IPO is a very encouraging sign.” Ablin also stated: “It just demonstrates the level of enthusiasm that shareholders have for the company.”


Be the first to leave a comment.

Leave A Commment

Allowed HTML tags: <a href=""> <abbr title=""> <b> <em> <i>
Please no link dropping, no keywords or domains as names; do not spam, and do not advertise! rel="nofollow" is in use