GM IPO Shifts Target To American Retail Investors

Edward Niedermeyer
by Edward Niedermeyer
gm ipo shifts target to american retail investors

GM”s IPO scuttlebutt has been dominated in recent weeks by speculation about possible foreign “cornerstone” investors. But, according to five sources who spoke with Reuters

GM is likely to sell about 80 percent of the common shares in its IPO and more than 90 percent of the preferred shares in North America.

Yes, despite deep skepticism about the GM IPO’s appeal to retail investors, GM will sell most of its equity in North America, and it’s even splitting its share price to bring the per-stock price into retail range. Why the sudden back-away from talk of courting global investment and “cornerstone investors” from abroad? Politics, baby! With Chrysler likely to end up owned outright by Fiat, something had to be done to keep The General at least nominally American-owned. Meanwhile, in news that is sure to thrill prospective retail investors, Special Inspector General of the TARP program (SIGTARP) Neil Barofsky is investigating the IPO… and says GM’s per-share price will have to hit $133.78 (pre-split) for the Government to break even. GM’s highest-ever stock price was $94.63, and that was back in April of 2000. Are we getting excited yet, retail investors?

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  • Chicago Dude Chicago Dude on Sep 23, 2010

    Ed, GM shares closed at $213.13 on September 11, 1926, the day before a 2 for 1 split. On September 13, 1926, after the split, they closed at $142.00 and were back over $200 a share by June of 1927.

    • See 4 previous
    • PrincipalDan PrincipalDan on Sep 23, 2010

      That's about what I thought. Comparing a peak price for a stock when you don't put it in context is like gripping about the price of a gallon of gasoline without a historical frame of reference. Think about a single piece of GM stock being worth enough ($2,000+) to buy a nice used motorcycle.

  • ChuckR ChuckR on Sep 23, 2010

    If I buy at $10 and sell at $20, I'm happy. That $134 is a sunk cost, as in we've done been sunk.

  • Colin42 Colin42 on Sep 23, 2010
    and says GM’s per-share price will have to hit $133.78 (pre-split) for the Government to break even. GM’s highest-ever stock price was $94.63 The price per share is irrelevant as it's the number of shares x the price that states the value, although i do find it interesting how peoples perceived value of a share is directly related to it's absolute price >$100 is expensive

  • Steven02 Steven02 on Sep 23, 2010

    Some people are expecting splits up to 7 times to make the price under $20 bucks. Will be interesting to see what happens.