General Motor will be reborn as a public company to-morrow with a stock offering, ending the government's role as majority shareholder and closing a remarkable chapter in American corporate history.
The U.S. government should make about $13.6 billion when GM shares start trading on the New York Stock Exchange. The federal Treasury is unloading more than 400 million shares of GM, reducing its stake in the company from 61 percent to about 33 percent.
The IPO could wind up as the largest in history. GM set a price of $33 per common share today, a day after it raised the number of shares it will offer to satisfy investor demand. When the U.S. government and other owners sell their shares, they'll raise $18.2 billion. GM will raise another $5 billion by selling 100 million preferred shares at $50 each.
Together, the sale of common and preferred stock will bring the deal's value to a record $23.2 billion.
General Motor performed better than expectation. For the third quarter, GM make a profit of $2.16 billion, averaging $1.2 per share, the best among the three US auto-makers. But for the whole year, Ford is expected to beat General Motor.
The largest owner now is still the government. It may take some time to get over. Economic recovery is still uncertain. It is yet to prove a success of their coming launching of their electric cars.
However, I have learned that the subscription is more than they previously planned.
