Wall Street has not seen an IPO from a U.S. automaker since the 1950s. But this year, the dry spell ended. A few months ago, Tesla Motors (TSLA) hit the markets. And now, of course, General Motors has filed papers with the SEC to hold its own public offering.

Those papers include GM's S-1, a prospectus over 500 pages long. Yet only a little more than a year ago, in June 2009, GM filed a very different document with the federal government: a Chapter 11 bankruptcy notice. At the time, GM needed $50 billion in bailout funds.

Much has changed between then and now. But is GM a fundamentally different -- and more viable -- company now?

What a Difference a Year Makes

As a private company, GM has had time to take tough measures to restructure its operations. For example, the company has consolidated operations (including its dealer network) and eliminated several brands, including Pontiac, Hummer, Saturn, and Saab.

GM was also able to unload various liabilities and bad assets. The net result is that GM is somewhat of a clean-slate for investors.

Given that this is the initial IPO filing, the transaction details have not been disclosed. Those will come in the next few months, as GM undergoes an SEC review.

The presumption is that GM will raise as much as $20 billion. This will be good news for U.S. taxpayers, since the federal government owns a hefty 61% stake in the automaker. Uncle Sam plans to sell roughly a fifth of its 304 million shares. It also looks like the United Auto Workers union will sell a portion of its 17.5% equity stake.

As for the underwriters, they include who-who's of Wall Street: Morgan Stanley (MS), J.P. Morgan (JPM), Bank of America's (BAC) Merrill Lynch unit and Citigroup (C). However, underwriter fees are expected to be lucrative because of the political sensitivity of GM's offering.

Preferred Stock and the Risks

Interestingly, GM plans to issue preferred shares, most likely to make the deal more attractive in the face of skepticism stemming from the company's high-profile failure last year. Preferred shares are a hybrid of common stock and debt. they typically have a nice dividend rate, but get priority in the event of a liquidation -- a feature that's likely to be attractive for major institutions and hedge funds. Investors will have an option to convert the preferred shares into common stock, but the details of that conversion have not yet been disclosed.

To be sure, GM is not out of the woods. Especially worrisome is the fact that, although GM spent decades as a public company, the IPO prospectus indicates that its financial controls remain inadequate. That could be the result of the disruption caused by bankruptcy, but whatever the reason, it is embarrassing disclosure for a company of GM's size and experience.

From a product and sales perspective, GM does appear to be on the mend, generating two consecutive quarters of profits of $2.2 billion. In fact, GM expects to have a profitable year.

That's particularly good news for IPO investors, many of whom are mostly interested in the short run. That also means it's likely GM's timing for an IPO will be spot-on.

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rwdvddndcrw

Those union workers everyone complains about, if higher paid etc. also means they pay more in taxes, they spend more on the economy, their concessions become a standard that helps even non-union workers achieve better pay/compensations, so quit bashing, your wrong about it. Now if GM creates vehicles with a demand, they will make money. As a commuter I wish they would make a METRO, like GEO's 1993 model that got over 50MPG. I owned several, one had 307000 miles on it when I sold it to a highschool kid's folks for $500. The kid got 2yrs more out of it. As far as stock performance, that's up to the market.

August 26 2010 at 2:47 PM Report abuse +3 rate up rate down Reply
1 reply to rwdvddndcrw's comment
Mike

Very good point about so called over paid union workers...most people do not have enough common sense to see the positive side of it.

August 29 2010 at 1:59 PM Report abuse +1 rate up rate down Reply
Arnie

Okay for all U union haters, I worked for "GM" for 25 yrs, not the union , they just represented me, not always to my liking. As for YOUR tax dollars, after the gov. gets them, they're not YOURS anymore, they go to pay for gov. funded programs, the multitued that I'm sure u use or get benefits from that I don't approve of but u get urs , why shouldn't I. Over the yrs that I paid federal taxes, along with the hundreds of thousands union "represented" members, how many millions if not billions of taxes have the regular joes paid in to the gov. who knows, but I hope they reopen my plant so I can finish out my 30 yrs.

August 26 2010 at 1:49 PM Report abuse +3 rate up rate down Reply
Gumby

"Where is the beef?"

August 26 2010 at 1:17 PM Report abuse rate up rate down Reply
kvja54

owned one gm product..will NEVER EVER own or think to own a goverment motors piece of crap...obama motors has lied to the people again...will america ever wake up ??obama,biden,lies,gm....embarassed yet ??

August 25 2010 at 9:02 PM Report abuse -5 rate up rate down Reply
1 reply to kvja54's comment
Jeff

can't wait to buy my next great GM car. Hope I can afford the new CTS Cadillac! Get over it douche bag, yes you KVwhatever.

August 26 2010 at 3:20 AM Report abuse +1 rate up rate down Reply
wlampe

Why would anyone put money into GM as a bond holder knowing full well that Obama will just givve it to the unions 1 - 2 years from now? They did it once and will do it again.

August 22 2010 at 8:29 AM Report abuse -7 rate up rate down Reply
2 replies to wlampe's comment
Mike

This comment is so stupid it does not deserve a response.

August 25 2010 at 11:22 AM Report abuse +4 rate up rate down Reply
teechman531

What have you and all of the other ditto-heads got against people making a living wage. It seems like a huge percentage of Americans think that they are not entitled to anything. As for Obama; he is our duly elected BLACK christian native born president. GET OVER IT! He probably saved about a million jobs and turned around what was once the biggest corporation in the world and made it profitable again. I am suprised that you are not upset about the fact that the Chineese are building sweat-shops here and probably colonizing us. When Reagan lent chrysler 1 Billion back in the early eighties did it upset you? I didn't think so.

August 29 2010 at 8:20 PM Report abuse rate up rate down Reply
gagesxm

LINE UP FOR THE SLAUGHTER...HISTORY ALWAYS REPEATS ITSELF...JUST A QUESTION OF TIME

August 21 2010 at 8:57 PM Report abuse -1 rate up rate down Reply
2 replies to gagesxm's comment
Jeff

Does that mean you will be coming back/ Please warn us.

August 26 2010 at 3:21 AM Report abuse +2 rate up rate down Reply
tjstieg

As a taxpayer I would like to have a stock certificate for those shares that I and all other taxpayers were forced to buy by our gov't. GM is still not out of debt --it still has billions in outstanding pension obligations. So rush out and buy IPO shares and if things go to the dogs again watch the federal gov't make your valuable IPO shares worth 10c on the dollar again. Just another form of redistribution of wealth.

August 21 2010 at 5:46 PM Report abuse rate up rate down Reply
strangersat

GM must survive and be profitable unemployment would go way up if remaning factorys would close and all support staff which is huge from ground maintance to building maintance the local suport to these foctorys is enormous behind your wildest expectations it devastates communitys. now same for parts plants support in these areas rail road.truck drivers local and over road,lacal utilitys ,property values, federal,state,local,taxes think about it will effect you badly plant in my area pays 12 millon+ year state local property taxes . Employes in plant donates 3 million anually to local united way. Look at dealers already closed empty buildings all support staff there gone from lawn maintance to building maintance,this could happen to every Gm dealer in the country.the job loss to this campany would effect every one in his country

August 20 2010 at 11:11 AM Report abuse +5 rate up rate down Reply
4 replies to strangersat's comment
David

GM a company dying a slow painful death. A company that owes billions to the american worker/taxpayer. GM you just don't get it. Turn out a Volt that no working family can afford???? On a death march.

August 20 2010 at 9:39 AM Report abuse -8 rate up rate down Reply
3 replies to David's comment
ntspat

Don't believe any claims that are made about "Preferred Stock" offered in the Government Motors IPO. The Government has the power to overnight nullify the value of the preferred stock same as they did with the Fannie Mae and Freddie Mac preferred stocks. They were supposed to pay first in the event of a liquidation and the Obama administration wiped them out with the swipe of a pen, leaving my wife and I and probably millions of others holding the bag. I for one lost $100K without any notice and invested the money through Wachovia (now Wells Fargo). This was a big part of our retirement. They will do it again without remorse. The GM IPS is a scam of mega proportions. I drive GMC products and have no problem with their great vehicles, just who now owns it and I don't trust them. Beware, it will make some people alot of money but the majority will get screwed!!!!

August 19 2010 at 7:18 PM Report abuse -2 rate up rate down Reply