Tweet
General Motors Co GM.UL pulled off the biggest initial public offering in U.S. history on Wednesday, raising $20.1 billion after pricing shares at the top of the proposed range in response to huge investor demand.
Including an option that would allow underwriters to sell more shares, expected to be exercised in coming days, GM looks set to raise $23.1 billion, making it the biggest initial public offering ever.
'What was that statement that used to float around? What's good for GM is good for America? Well, I think in this case, what's good for GM is good for the American taxpayer,' said Adrian Cronje, chief investment officer at Atlanta-based wealth management firm Balentine LLC.
The strong response to the stock sale reflects a groundswell of investor confidence that GM is moving beyond its unpopular, taxpayer-funded bankruptcy in June 2009 with sharply lower costs and higher profit potential.
The government's stake in GM will drop to about 33 percent from 61 percent if all available shares are sold.
The success of the IPO is good news for the Obama administration, which faced criticism for bailing out GM, and will help the automaker shed its 'Government Motors' label.
'General Motors' IPO marks a major milestone in the turnaround of not just an iconic company, but the entire American auto industry,' President Barack Obama said in a statement.
The stock will begin trading on Thursday on the New York and Toronto exchanges, and underwriters expect the shares to gain 10 to 20 percent on the first day.
Auto industry executives and analysts said the reversal in Wall Street sentiment toward GM pointed to renewed confidence in an industry that was hit hard by the credit crisis of 2008.
That is a positive sign for a range of auto-related companies, including Chrysler, that are looking to tap the credit and equity markets in coming months, analysts said.
'You're not in GM for a three-month investment,' Tim Leuliette, a director at auto parts maker Visteon Corp (VSTO.OB), said at the Reuters Autos Summit.
'You're into GM because a critical element, a critical building block of the economy, has significantly repositioned itself to be competitive.
United Auto Workers President Bob King, whose union stands to reap $3 billion from the IPO for an affiliated trust fund for retiree health care, said GM's factory workers had an interest in seeing its shares perform well.
'The higher that stock price is, the more money General Motors has got to invest in products, new facilities,' King told Reuters.
GM sold 478 million common shares at $33 each, raising $15.77 billion, as well as $4.35 billion in preferred shares, more than the initially planned $4 billion.
Powered by WizardRSS | Full Text RSS Feeds
'What was that statement that used to float around? What's good for GM is good for America? Well, I think in this case, what's good for GM is good for the American taxpayer,' said Adrian Cronje, chief investment officer at Atlanta-based wealth management firm Balentine LLC.
The strong response to the stock sale reflects a groundswell of investor confidence that GM is moving beyond its unpopular, taxpayer-funded bankruptcy in June 2009 with sharply lower costs and higher profit potential.
The government's stake in GM will drop to about 33 percent from 61 percent if all available shares are sold.
The success of the IPO is good news for the Obama administration, which faced criticism for bailing out GM, and will help the automaker shed its 'Government Motors' label.
'General Motors' IPO marks a major milestone in the turnaround of not just an iconic company, but the entire American auto industry,' President Barack Obama said in a statement.
The stock will begin trading on Thursday on the New York and Toronto exchanges, and underwriters expect the shares to gain 10 to 20 percent on the first day.
Auto industry executives and analysts said the reversal in Wall Street sentiment toward GM pointed to renewed confidence in an industry that was hit hard by the credit crisis of 2008.
That is a positive sign for a range of auto-related companies, including Chrysler, that are looking to tap the credit and equity markets in coming months, analysts said.
'You're not in GM for a three-month investment,' Tim Leuliette, a director at auto parts maker Visteon Corp (VSTO.OB), said at the Reuters Autos Summit.
'You're into GM because a critical element, a critical building block of the economy, has significantly repositioned itself to be competitive.
United Auto Workers President Bob King, whose union stands to reap $3 billion from the IPO for an affiliated trust fund for retiree health care, said GM's factory workers had an interest in seeing its shares perform well.
'The higher that stock price is, the more money General Motors has got to invest in products, new facilities,' King told Reuters.
GM sold 478 million common shares at $33 each, raising $15.77 billion, as well as $4.35 billion in preferred shares, more than the initially planned $4 billion.
Powered by WizardRSS | Full Text RSS Feeds