GM Eyed Hong Kong IPO Listing, SAIC Interested In Stake

From a week deep in our “How The Hell Did We Miss That” file comes a Reuters report that shows GM considered floating its IPO on the Hong Kong Hang Seng index. GM’s interest in a Hong Kong float has obvious roots: the company is extremely well-positioned in China, where high savings rates and the prospect of steady local sales growth could have helped bring in both private investors and GM’s partner firms. But according to a Reuters source, GM rejected the idea because it would have delayed the IPO past its Thanksgiving deadline

I don’t think signaling goodwill toward Asia is likely to be a significant enough argument for all the cost and complexity. I don’t want to overstate the cost and complexity but it’s not insignificant

Read more
Quote(s) Of The Day: The Coming IPO Edition

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, commenting in the WSJ [sub] on GM’s IPO. More analyst commentary on GM’s just-released S-1 filing after the jump.

Read more
GM's S-1 IPO Filing: The Risks

The most interesting section of every S-1 filing is undoubtedly the “risks” section, in which companies are legally compelled to disclose all possible material risks associated with investing in their IPOs. Unfortunately, these risks are typically overstated, as no firm on the verge of going public wants to run into trouble with the SEC for under-reporting risk. As a result, many of the risks disclosed are fairly mundane, everyday risks in the world of business (currency, commodity price, and other economic fluctuations, etc). At the same time, companies rarely give reporters a full tour of their major risk areas the way these sections do, so they’re usually worth a read. GM’s just-released S-1 filing is no exception…

Read more
Red GM's S-1 Filing Here

GM has filed its S-1 paperwork with the Securities and Exchange Commission. Read the entire document here.

Read more
GM And SAIC Strengthen Ties Ahead Of IPO

With GM’s IPO S-1 now set for a Wednesday filing, The General is announcing a joint engine development project with its Chinese partner SAIC, spurring on rumors that the Shanghai-based automaker could buy into GM’s forthcoming IPO. Reuters reports that GM and SAIC have signed an agreement to develop a new range of 1.0-1.5 liter direct-injection, turbocharged engines in the vein of Ford’s EcoBoost mills. The ground-up joint engine development is significant because, as the WSJ [sub] reports

it marks the first time when GM and SAIC – partners for more than a decade already – are going to develop “base” propulsion technology, going a step further than simply integrating existing engine and gearbox technologies into automobiles.

GM has already moved much of its advanced technology development to new Chinese R&D labs, and this attack on Ford’s EcoBoost technology is likely to become a global engine. But what does the ever-increasing cooperation between GM and SAIC (which recently bought out GM’s controlling interest in their Shanghai GM joint venture) portend for the GM IPO?

Read more
Ask The Best And Brightest: Who Will Be GM's "Cornerstone Investors"?

GM’s IPO filing still has yet to appear on the SEC’s EDGAR database, but while we wait for the S-1 form to clear, Reuters has some details on what to expect from the sale. The big news:

GM is mulling a plan under which sovereign wealth funds or pension funds would serve as “cornerstone investors,” a technique often used for large initial public offerings to show that key investors are supporting the deal, four people said…

Each cornerstone investor would likely be asked to commit to buying 2 percent to 10 percent of the IPO and cornerstone investors would likely account for 10 percent to 30 percent of the total IPO, one of the sources said.

On the other hand, another source says GM is targeting 15 percent of its equity towards cornerstone investors, with 20-25% is aimed at the retail investment market. Either way, Reuters points out that another recent large IPO of a government-owned business, the Agricultural Bank of China, relied heavily on cornerstone investors… but that the politics of such a strategy could be risky.

Read more
GM To File IPO Paperwork Tomorrow, Opel Woes Cited As Major Concern

Reuters [via ABC] reports that GM has completed its S1 filing and will file Monday, after a Friday the 13th filing was delayed in order to

add a management risk factor after Chief Executive Ed Whitacre announced on Thursday he would step down and be succeeded by Dan Akerson effective September.

And that won’t be the only “risk factor” warning to investors in GM’s S-1. Bloomberg found a number of analysts ready to support the headline

GM’s Akerson to Struggle in Proving to IPO Investors Europe Fixable

Any bets on the number of times the word “Opel” appears in tomorrow’s filing?

Read more
GM Moving To File $12b-$16b IPO Paperwork On Friday The 13th?

One might imagine that GM wouldn’t want to scare anyone away from its forthcoming IPO, but triskadecaphobes might just want to sit this one out. With a $5b credit line reportedly secured from a group of “at least 15” banks, Reuters [via Automotive News [sub]] reports that GM could file its S1 with the SEC as soon as tomorrow. In case that date is too pregnant with superstition, GM could wait until next Monday to file paperwork. Either way, GM is expected to go public by the Thanksgiving holiday.

Read more
Quote Of The Day: Escape From Government Motors Edition

We want the government out, period. We don’t want to be known as Government Motors.

GM Chairman and CEO Ed Whitacre channels his inner Rick “Bankruptcy is not an option” Wagoner in the New York Times, telling the taxpayers who put him in charge of a bailout-rinsed General Motors to get lost. Sure Ed, we’ll all go NSFW ourselves just as soon as we get our $49.5 billion back. Talk about putting the throat-clearing guttural in chutzpah…

Read more
GM's IPO: For King, Country, or Cadillac?

After ending the first quarter of this year with $35.7b in cash and equivalents, GM was in the best position it’s enjoyed in decades. And yet, with an IPO prospectus looming, The General is seeking a $5b line of credit and trotting out EBITDAPRO as its in-house measure of financial success. Both of these tactics are hallmarks of companies that are doing poorly, and GM has already learned how problematic loading up on debt and sliced-and-diced financials can be. So why is The General inviting criticism from outlets like Edmunds Autoobserver, which characterizes GM’s push towards an IPO as the rebirth of old bad habits? The simple answer: “business execution.” In other words, GM may have a lot of cash, but it’s got nearly as many demands on its resources as well… and these cash drains hardly add up to a coherent strategy.

Read more
GM Asks IPO Underwriters To Buy Its Cars

Bloomberg reports that GM has already pulled off one of the ballsiest IPO moves ever, by asking banks bidding to underwrite its IPO to use fees to subsidize the purchase of GM vehicles by its employees. According to the report, a GM document sent to bidding banks solicited

ideas as to how we can use the IPO to reposition GM and its vehicles within the investment community including your firm’s willingness to reinvest any portion of any underwriting fees into the purchase of GM vehicles for your employees and/or company use.

Read more
GM's IPO: Faster, Harder And Less Satisfying

Despite having more cash than debt for the first time in decades, GM is going back to Wall Street in search of fresh debt. Over the weekend, The General has been in talks with several banks to secure a $5b revolving line of credit to shore up its liquidity position ahead of an IPO that’s rumored to take place in August. At $5b, GM’s desired line of credit would essentially replace the $5.8b the automaker has repaid to the Treasury, and will help it deal with a number of pressing cash needs to maintain its shaky global empire. But with so many pressing uses for the cash, and political pressure mounting for a rapid IPO, can GM deal with its issues and take on more debt and be worth what the government wants it to be worth? Troublingly, the answers to these questions are not to be found on GM’s balance sheet.

Read more
Tesla Saves Toyota's Bacon

So Tesla lost $30m last quarter. Do you know who made $20m in profits on Tesla in one day?

Read more
What's Wrong With This Picture: The Case For GM's IPO Edition

Will the North American market for cars go up 45 percent in the next four years? I’m not convinced. Certainly the momentum hasn’t shown up yet. But this slide is from GM’s “Global Business Conference” which the company is holding in Michigan this week to drum up support for its forthcoming IPO. So… a little over-optimism is hardly surprising. But we’re not the only ones skeptical of GM’s ability to take flight as a public company. Automotive News [sub] reports that

Mirko Mikelic, a fixed income portfolio manager at Fifth Third Bank in Grand Rapids, Michigan, said he expected GM to face grilling about the risks of a return to recession in the United States.

“There’s concern about a double dip out there. That’s probably the biggest thing that’s weighing over GM coming to the market because that’s going to keep (auto sales) down for another year or two,” he said.

Check out the complete presentation in PDF format here, and decide for yourself if The General is worth an investment. The slides after the jump are certainly more convincing…

Read more
Some Advice For Tesla's First Day Of Trading

Far be it from us to tell you to take Jim Cramer’s word as gospel… but he does seem to have Tesla’s IPO figured out. And now that the stock is public (NASDAQ: TSLA), he wants you to run away screaming. We find it difficult to disagree… but feel free to keep an eye on the stock yourself.

Read more
  • Art Vandelay I’d grab one of these if I’d spent my working life at GM for sure!
  • Analoggrotto The factory is delayed due to an investigation of a peter puffery ring lead by VoGhost, Tassos, EBFlex a Chevrolet Volt.
  • FreedMike Looking forward to the protests at the factory accusing Toyota of excessive woke-ism. First,, grooming. Lord help us all.
  • MrIcky I remember when Gladiators came out and everyone was shocked at how expensive they were. Now all the off road specials have caught up or passed it financially. I like this truck a lot, but I'd still take my Rubicon over this. I'd take this over the Ranger Raptor or Tacoma TRD though. When I found out the increase in track for the new TRD was just wheel offset-I knew they were just phoning it in. Why spend so much R&D on those stupid seats when you could have r&d'd longer arms or a front locker.
  • Alan Hmm, I see a bit of politicking here. What qualifications do you need to run GM or Ford? I'd bet GM or Ford isn't run by experienced people. Anyone at that level in an organisation doesn't need to be a safety whip, you need to have the ability to organise those around you to deliver the required results.