Historic Day for GM
General Motors says its common stock will sell for $33 per share when its initial public offering takes place Thursday.
The IPO brings the U.S. government closer to getting back part of the $50 billion it gave GM to help it through bankruptcy protection last year.
The government will sell 412 million shares and get $13.6 billion. It will still have about 500 million shares, or about 33 percent of GM. It would have to sell them for $53 a share, or $26.4 billion, for taxpayers to get back their $50 billion back.
The government and other GM owners will sell 550 million shares starting Thursday. There has been strong investor interest in what could be one of the world’s largest IPOs ever, worth up to $18.2 billion.
“As we prepare to enter the equity markets, all of us at GM are excited about this historic milestone. We are especially appreciative of those who stood by us through the toughest times, and we are dedicated to creating value for all of our stakeholders,” said GM Vice Chairman and Chief Financial Officer Chris Liddell.
“With a new business model, centered around designing, building and selling the world’s best vehicles, we’re ready to compete and are confident about the company’s future,” Liddell said.
GM raised about $15.8 billion through the common shares and $4 billion in preferred shares, a source told Reuters.
“There is a public perception that this will be easy money,” said David Cottam of National Wealth Management, an independent adviser firm in Morristown, New Jersey.
Cottam said he has seen a lot of interest from clients and that he put in “indications of interest” with firms where he holds prime brokerage accounts and does other business, including Morgan Stanley Smith Barney, one of the IPO’s lead underwriters.
On Tuesday, GM increased the number of shares to be sold by 31 percent and increased the price range on the shares.
© MMX, WWJ Radio. All Rights Reserved. The Associated Press contributed to this report.