Banks Make GM IPO the Largest Ever

The General Motors (GM) IPO is now the largest ever, following the expansion of the offering by the underwriters.

The company announced Friday that "the underwriters have exercised in full their over-allotment options to purchase an additional 71.7 million shares of common stock from the selling stockholders, for a total of $2.37 billion, and an additional 13 million shares of mandatory convertible junior preferred stock from the company, for a total of $650 million, in connection with the previously announced public offering of common and mandatory convertible junior preferred stock of General Motors. The exercise of the over-allotment options brings the total offering size to $23.1 billion."

The firms include Morgan Stanley (MS), JP Morgan Chase (JPM), Bank of America (BAC), and Citigroup (C). According to Reuters, "The added shares vaulted GM past Agricultural Bank of China's $22.1 billion IPO in July and underscored the strong demand for the taxpayer-rescued automaker's stock."

The market's attention can now turn to the value of the shares. The stock has traded between $33.11 and $35.99, and are now at the lower end of that range -- $33.80.

The acute concern of traders is that the U.S. and European car markets may be slow to recover and a prolonged period of economic stagnation could hurt the company's earnings prospects. GM has had particular problems with its Opel and Vauxhaul operation in Europe.

GM's bright spot is in China, where it is among the top sellers. But, because China is now the world's largest car market, it has become increasingly competitive. For example, Ford (F) has announced that it will open 66 dealers in the People's Republic.

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113 Comments

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P.J.

These GM vehicles are the same garbage cans they were making 2 years ago when they went belly up ! New advertising and marketing and the lemmings are marching right back into the abyss !! They will get what they deserve when this new scam collapses yet again !!!

November 29 2010 at 12:31 AM Report abuse rate up rate down Reply
rwdvddndcrw

It is predicted that the yellow race will rule the world eventually,,, If they are buying GM, It will only mean profits as there are so many of them. Look how hmong buy Toyotas loyally, now they may turn to GM vehicles. I bought a few shares just over $33, don't really care what happens it's a small gamble that may payoff or not. I myself really like the 2010 Ford Taurus,,, but I won't buy new, I usually let someone else pay the overhead, then I buy 3 to 4 yrs old cars for the long haul, that's the best value in vehicles.

November 28 2010 at 10:36 PM Report abuse +2 rate up rate down Reply
crimson00king

Americans we must agree on 1 thing and that is the rich do not need more tax breaks. We would have to borrow another 700 billion from the Chinese to pay for their breaks. This is a security risk for America since they are very friendly with north Korea. Please contact your congrssmen senators and the White House by phone or e-mail and tell them NO EXTENTIONS FOR TAX BREAKS FOR THE RICH we are running out of time to send them a message.

November 28 2010 at 6:43 PM Report abuse -2 rate up rate down Reply
2 replies to crimson00king's comment
kawarcitek

Crimson00king, you are not thinking correctly about the tax situation. 95% of all the taxes in America are paid by 3% of the people. 50% of the American people do not pay any income tax beyond their FICA taxes. Are these numbers fair? Now you want that 3% to pay even more. Every American should pay SOME tax on their income. We should stop trying to have class warfare in America. If you want people in America to climb out of poverty, let the wealthier people who own businesses keep more money to invest, create more jobs, and soon our economy will be improving. Many of those top 3% have stopped doing anything to help the economy.

November 28 2010 at 8:40 PM Report abuse +2 rate up rate down Reply
cla1712

Who do you think gives you your paycheck, a poor person? We're not borrowing 700 billion from the Chinese to get jobs for people, we're borrowing for programs that make it easier to not work!!!

November 29 2010 at 1:27 AM Report abuse +3 rate up rate down Reply
jimbo13134579

The G.M. IPO is the biggest boondoggle ever perpetuated on the American public. How can a company that for all intents and purposes was bankrupt, borrowing large sums of money from the government (our money), have the cahoneys to sell stock, billions of dollars of it, when the company probably will never have the assets to cover the stock? All I can say, is if you bought this stock, you are as dumb as a loaf of bread.

November 28 2010 at 6:21 PM Report abuse -1 rate up rate down Reply
ericsonhudson

A NORTH KOREA WAR = HALTED EXPORTS FROM JAPAN AND SOUTH KOREA AND INDONIA ISLE = FORD AT $70.00 AND DOW JONES 15,000 , THAT WILL TEACH US TO MESS WITH CHINA'S BOYS.

November 28 2010 at 4:35 PM Report abuse +2 rate up rate down Reply
contrabuster111

Good luck suckers!! When the stock hits 15 dollars a share by next year!!! I had stock in this company, now it is worthless.. The new GM will go the same way!!!

November 28 2010 at 2:47 PM Report abuse +3 rate up rate down Reply
2 replies to contrabuster111's comment
kmills1019

I am so sad you hate America.

November 28 2010 at 3:01 PM Report abuse rate up rate down Reply
kawarcitek

kmills, you are very uninformed about GM. Its not about hating America. GM does not represent the America I know. They used a very UNamerican scheme and the federal bankruptcy code to leave thousands of Americans with worthless "old" GM stock, took hundreds of franchise dealerships from good honest business people, left secured creditors with nothing, even people with lawsuits for injuries were left without anything. I know--our hearts were broken as well as our financial security when GM closed our Cadillac dealership after 42 years. We employed 35 people. They and their families lost their financial security as well. As far as we can tell, GM has not changed their corporate culture at all. I think Contrabuster is right--GM will never be a successful company.

November 28 2010 at 8:25 PM Report abuse +1 rate up rate down Reply
dccwest

Sean Hannity is an economic indicator. When he supports an an economic policy decline is certain. When he opposes and economic policy, decline is certain.

November 28 2010 at 2:31 PM Report abuse rate up rate down Reply
Spoonercat

The last GM you will ever see in my yard is about to go down the road. Have had numerous ones but refuse to support "the worst managed company in the " history of the world " according to experts looking at the company before Obummer bailed the a holes out with my tax dollars and then allowed an IPO that the wee folks were not given a chance to participate in. A vote on the bailout of this company would have yielded a thunderous "NO" from the taxpayers but Obummer put it through. PissonGM

November 28 2010 at 1:24 PM Report abuse +1 rate up rate down Reply
3 replies to Spoonercat's comment
plan7766

this was a success according to jackwad dickwest

November 28 2010 at 12:56 PM Report abuse +1 rate up rate down Reply
dsamliv

so since GM is doing so well now, does that mean that they are going to pay back the money they stole from us soon?

November 28 2010 at 12:12 PM Report abuse +4 rate up rate down Reply
2 replies to dsamliv's comment
kmills1019

They have begun paying us back.

November 28 2010 at 3:02 PM Report abuse +1 rate up rate down Reply
kawarcitek

Once again KMills, you show that you are totally uninformed about GM. They paid back one loan from the Federal government out of the money from another Federal loan.

November 28 2010 at 8:29 PM Report abuse -1 rate up rate down Reply