We all remember the day when the world's leading manufacturer in the automobile industry filed for chapter 11 (reorganization). Many thousands of workers will remember June 1, 2009 as the date when they had to return home and tell their families the horrible truth about their job loss...
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| Source: ft.com |
Today, General Motors (GM), the second world's largest carmaker after the Japanese Toyota returned to the stock exchange through IPO, which promises to be a record in world history. After the bankruptcy of the automobile giant its common shares once again started to be traded on the New York Stock Exchange (NYSE) and on the Toronto Stock Exchange under the ticker symbols "GM" and "GMM". The first transaction was at a price of $35 per share after the starting point of $33 IPO price.
I don't think that the return of GM back on the stock exchange can be called a debut but this is truly something that the company can be proud of. However, investors were unable to sell their shares of this carmaker in the last half year, which until recently were considered "blue chip" and were part of the Dow Jones index.
Dan Akerson, GM’s chief executive, said that “going public is an important milestone on the way to becoming a new and better and different GM”.
On Wednesday the General Motors Company announced the successful placement of 478 million common shares at the upper boundary of the earlier announced price range (32-33 dollars per share), as well as 87 million of convertible preferred shares at $50 per share. The sellers of common shares are current shareholders of GM, including U.S. Treasury to whom belonged about 61% of the company before the IPO and now - 37%. Total income from the placement accounted to 20.1 billion dollars, making it the largest IPO in U.S. history. Very impressive for the company once being the bankrupt, isn't it?
Many analysts unanimously say that the return of General Motors on the stock exchange, which took place much faster than it was anticipated, plays a huge positive role for both the company and the U.S. government. GM leadership has repeatedly complained that the label "Government Motors", which got stuck to the company after its bankruptcy, damages its image and has a negative impact on their sales. In the mean time Barack Obama's Administration should be quite satisfied as the demand for shares of GM has been very high, and the government will manage to return to the treasury about $14 billion of those $50 billion that were allocated under the bail-out to the "symbol" of American national industry.
It is seems like a "happy end of the happy beginning" or vise versa! Well at least for this moment this IPO did not only start generating big bucks for the investors but also providing job places which is so important during the current "no jobs" situation.
K.S.
Posted on: Wednesday, 17 November 2010
Sources:
www.ft.com
www.bbc.co.uk
www.rbc.ru
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