Editor’s Note: With GM’s S-1 IPO filing hitting the web today, every IPO and auto industry analyst is weighing in on the offering, and the state of GM. Here’s a collection of some of today’s more notable comments.
It looks to me that GM should be worth no more than Ford. If that’s the case, then the taxpayers will lose about 50% on their investment.
Francis Gaskins, president of IPOdesktop.com, commenting in the WSJ [sub] on GM’s IPO. More analyst commentary on GM’s just-released S-1 filing after the jump.
There seems to be a high demand for GM stock from hedge funds and large institutions, but retail investors don’t want to touch the stock… There is no doubt in my mind that we will see the administration patting itself on the back, congratulating itself, telling the public that the investment into the automakers was a good idea
David Silver, of WStreet.com, in MarketWatch. Silver reckons the IPO could bring in up to $18 billion with another $5 billion possible from the preferred shares, and up to $10 billion coming from the government’s holdings.
The fact that we are even talking about this is a milestone and was far from guaranteed…I think is an example not of an expanding government role, but the government and the private sector working together in an unprecedented way.
University of California at Berkley professor Harley Shaiken, in the Freep.
It sounds to me like a large part of it will go to repay the government and that only the proceeds of the preferred shares go to the company. But there’s still going to be an overhang of ownership, and that’s really looming over and will be looming over this company’s head for some time.
Depending on how the preferred shares are priced, there could be a good pricing opportunity depending on what the rating is. My sense is that the government will try to get their ownership down to as little as possible.
Jack Ablin, Chief Investment Officer, Harris Private Bank, in Reuters.
It was totally perplexing. I personally do not think the timing was right [for Whitacre to step down as CEO]. It put the filing of the IPO behind ….and we know that one of the main attributes that Wall Street looks for when the look at an IPO is stability in management. That just shows they didn’t have a succession plan.
Sheldon Stone of Amherst Partners, in the Freep.
I’m glad it’s out because the hype surrounding when it was coming out and the fact ‘Oh they didn’t file today, maybe it’s a problem’ really pressed too much on the anxiety button for investors.
Now comes the difficult part, assessing what the valuation of GM truly is…It’s a deal that seems to be very reasonable at this point based on what they’re showing for the fees that they paid.
I think this offering has a two-month shelf life on it
Our position on the IPO is: Are the investors out there? Are they ready to invest as quickly as GM’s expectations are? I hope they are. We are not behind the closed doors but we are hearing good things.
Ken Lewenza, president of the Canadian Auto Workers union, in the Freep.
The surprise thing was the change in leadership — that was a wrench in the works there. I thought it may have behooved them to wait a little bit. A few more quarters of these solid results might have helped them out. The timing part is difficult. What if there is a double-dip recession? It is difficult to gauge the best time to come out.
I have to give them credit for restructuring, but it will come down in terms of economic headwinds — that will be the biggest issue.
Mirko Mikelic, Fixed Income Portfolio Manager, Fifth Third Bank, in Reuters.
They’re using the preferred shares…to pay some dividends and probably lock up some key shareholders. They will obviously try to get some key investors in now, like some wealth funds from the Middle East. That will be the first strategy, and then they will basically do more formal marketing for the offering to more institutions and retail (investors).
It’s all in now, so by November it’s going to happen.
Josef Schuster, IPOX Schuster LLC in Reuters.
People may have felt a little bit more comfortable if there was another quarter or two of profitability like we’ve seen in the last two quarters. You can really say somebody is fully reformed when they’ve been out of rehab for a longer period of time.
One thing overall investors aren’t recognizing fully is that these (U.S. auto) companies are making money in a variety of products now and that is not something that used to happen. That kind of diversity really needs to be recognized and rewarded.
Rebecca Lindland, IHS Global Insight, in Reuters.
If GM is valued in that $60 billion to $70 billion range, that gets the taxpayer paid back. But the question is, is that achievable for a company that is a year out of bankruptcy, that has just changed CEOs and that faces negotiations with the UAW? I just think that the risk of failure with the IPO is bigger than the risk of being known as Government Motors. Personally, I think they should wait and prove out their earnings.
I’m very positive about GM — they’ve got good products, they’re blowing up the bureaucracy and hopefully Akerson can keep that going. My only question is with the timing of the IPO.
Brad Coulter, O’Keefe And Associates in Reuters.
I can find other attractive names with lower risk for my portfolio
Ariel Hsiao, HSBC’s New Rich Equity Fund