GM IPO Set; You Buying?
General Motors announced today that it is filing a public offering of stock Nov. 18 and that the price of the common stock will be between $26 and $29 a share. The sale comes nearly two years since President George W. Bush first approved a bailout of the auto industry and 18 months after President Barack Obama sponsored a government-backed bankruptcy and ownership stake in GM and Chrysler.
The sale of nearly 365 million shares will raise as much as $10.6 billion for the company. The U.S. Treasury plans to sell a portion of its shares after the IPO, but it is unclear how much. Many analysts suggest the government will still lose money on the deal. One number mentioned today was a $131 share price for the government to break even.
No matter the balance sheet, the IPO will mark the beginning of the end of government ownership of GM, and it will put the company back on the free market. So the question remains: Would you buy GM stock?