Poll: Are You Going to Buy General Motors Stock?
On June 1, 2009, General Motors (GM), once the world’s largest car manufacturer, filed for Chapter 11 protection. Before and during the bankruptcy protection, GM received billions of dollars taxpayer money to stay afloat and reconstruct. Since then, the Detroit automaker slashed jobs, closed plants, shut down dealerships, reduced debt burdens, and, mostly importantly, started again to build cars that people actually want to buy. Despite the controversy around the bailout, which made the U.S. government its largest shareholder, GM appears to have turned things around as 2010 will be now the world’s second largest car maker’s first profitable year since 2004.
This week, the new GM will again offer its shares to the public in an IPO that could fetch $10 billion, making it one of the top 5 biggest IPOs in U.S. history. According to Renaissance Capital, GM is expected to price its shares in the $26 to $29 range Wednesday and begins trading on Thursday under symbol GM on NYSE. Renaissance Capital also reported that the midpoint could be revised to the low $30 range and increase the number of shares due to high demand. The market value of GM will be at $49 billion even at the midpoint of the $26 – $29 price range.
So are you going to buy GM stock in its IPO?
Update: Looks like GM stock will be priced between $32 and $33 a share.
Update2: GM stock is price at $33 apiece on Wednesday, November 17, 2010. The company sold 478 million shares to raise $15.8 billion, the third biggest IPO in U.S. history behind Visa ($17.8 billion, 2008) and ENEL SpA ($16.5 billion, 1999). The size of the share sale was 57% larger than originally proposed size.
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Update3: GM stock finished at $34.19 on the first day of trading on Thursday, November 18, 2010, after reaching an intraday high of $35.99. It’s an nice increase on top of its IPO price of $33.00 a share, but I had expected more. And I didn’t buy any share myself. I own some Ford (F) shares that I got a few years ago at $7.50. The stock is now traded at $16.12. Having one auto stock is enough for me
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