General Motors, Public Company
General Motors went public at $33/share today, generated huge trading volume (452m shares traded) and ended the day at $34.19. Automotive News [sub] reports that the government stake in GM “could” be as low as 33 percent post-IPO. Only five percent went to “large foreign investors,” including one percent to the Chinese bête noir SIAC, which hinted at future cooperation with The General on “exploration of overseas markets.” The only bad news? Had the Treasury sold its entire stake at the closing price today, it would have been down $9b. Now GM’s stock price needs to hit $48.58 before taxpayers make good on their investment. But with a market capitalization of about $63b, GM is at least worth more than the taxpayers put into it. Which, using a variation of Project Car Hell logic, is a real accomplishment.
More by Edward Niedermeyer
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I suspect this IPO will make more money for the Wall Streeters who set it up than it will for the new investors, although a company that has Uncle Sam for a sugar daddy is kind of tempting: http://www.thestreet.com/_yahoo/story/10928128/1/dumbest-of-this-weeks-5-dumbest-for-gm-every-day-is-a-tax-free-day.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA One of the bad things about this whole deal is that GM gets breaks from the government that its competitors don't. That's why they call this "crony capitalism".
Barnum's Law: there's one every minute.
This is interesting about GM's operations before the IPO: http://www.bizzyblog.com/2010/11/17/gms-ipo-uncle-sams-pump-and-dump/ I still talk to a lot of people who swear they will never buy a product from Government Motors. I don't see how GM will gain any market share without paying back the government, which won't happen in my lifetime.
Another good article about this: http://dailycaller.com/2010/11/18/gm-selling-at-a-loss-should-tell-you-something/