CARS - If everything goes as planned, General Motors' Initial Public Offering on November 17th will be the largest U.S. IPO since Visa Inc's $19.7 billion IPO in 2008 and the second biggest IPO in American history.
$13 billion is the goal, but GM's underwriters could sell an additional 54.75 million common shares and an extra 9 million preferred shares if the IPO attracts robust investor demand, which raises the potential IPO to $15.65 billion USD.
Once a touted "blue chip" stock, GM will return as its GM ticker symbol that it used in the years prior to its 2009 bankruptcy. After the IPO on November 17th trading of the GM stock will resume on November 18th and it will be an interesting sign of whether investor confidence in the USA has returned.
The governments of Canada and Ontario plan to sell their combined stake of 11.67% down to 9.64% and the United Auto Workers is expected to reduce their stake to 15.33% from 19.93%.
Although frankly the UAW is missing out on a golden opportunity here. They should be BUYING MORE of General Motors' stock so that they can eventually control the company they work for. If they were smart the UAW should set their sights on eventually owning 51% of GM.
The biggest seller of their shares will be the U.S. Treasury, which is currently the majority shareholder with 60.83%. GM plans to sell 365 million common shares at $26 to $29 USD each, raising about $10 billion USD at the midpoint, according to updated IPO papers filed with the SEC.
GM also plans to sell about $3 billion USD of preferred shares, a less risky form of equity that could attract dividend and fund investors.
The IPO gives GM a valuation of a little over $41 billion USD, but its important to note that for taxpayers in the USA to break even on the investment of bailing out General Motors the valuation needs to be much higher, roughly $70 billion USD.
But that $29 billion loss is a drop in the bucket compared to the $700 billion of America's biggest investment banks, which are still paying their executives million dollar bonuses each year.
Mind you the current valuation is a 16% discount compared to the market valuation of Ford Motor Co., currently valued at $48 billion and much smaller than General Motors. GM is expecting its stock to soar out of the gates on November 18th when trading resumes. Investors could see anywhere from a 5% to 15% jump in value in the first week alone.
American auto sales are expected to rise to about 11.5 million in 2010 from 10.4 million in 2009, and recover to the pre-recession level of 15 million units / year by 2012. As long as auto sales remain above 11 million annually and GM's market share remains stable then General Motors will break even. If it goes above 11 million, like it will this year then profits will start to pour in.
General Motors is the top American automaker by sales and is expected third quarter earnings of $2.1 billion. 2010 will be the first time in several years that GM has churned a solid profit.
American auto sales in October were up a steady 3.5%. GM's sales were up 36% compared to last month and up 64% compared to last year. Ford's sales were up 19.2% and Chrysler's sales were up 37% compared to last year. Other winners are Hyundai with sales up 38%, Subaru is up 25% and Volkswagon is up 18%.
American, Canadian, Toronto & International News Commentary: Spreading Freedom in the Face of Tyranny
November 4, 2010
General Motors IPO & strong October sales
Labels:
Capitalism News,
Car News,
Economic News,
USA News
Subscribe to:
Post Comments (Atom)
Affordable Website Design & SEO
|
Featured Posts
The Sarcasm Symbol
Ever had some confusion online or with your cellphone when someone fails to catch the sarcasm? Well now with the SarcMark you can ge... |
|
Behold, the Scorpion Hydrogen Supercar
CARS - To the right is the future of supercars... it is a hydrogen supercar called the Scorpion. The Scorpion from Ronn Motors in Texas is t... |
|
Documents show Stephen Harper misusing public funds
CANADA - According to 950+ pages of documents obtained by the Canadian Press under the Access to Information Act the Privy Coun... |
|
Pink's Rosie the Riveter
ENTERTAINMENT - What I like about this video is how it meshes different social movements like feminism, veganism, anti-capitalism... |
|
California's Dustbowl
ENVIRONMENT - The photo on the right is a farm in California that has been put up for sale. Its just one of thousands of farms that are n... |
|
Is Steampunk the New Goth???
GOTHIC - Watch out what you see on the subway late at night because while in 2001 you might have seen some pretty freakish goths, by 20... |
|
Do you have enough Ice Water in your diet?
HEALTH - A Calorie (large C) is a measurement of the amount of energy needed to raise the temperature of a litre of water (1 kg's worth) ... |
|
North Korean timeline towards Inevitable War
POLITICS - The following is timeline of events that have occurred on the Korean Peninsula. 1945 - Japan surrenders to the United States a... |
|
Judgment Day is Tomorrow, so sayeth Cult
RELIGION - According to a cult based in California, Judgement Day is tomorrow (May 21st 2011) and Jesus Christ will return to the Earth a... |
|
Sex in Space Forbidden
SEX/TECHNOLOGY - Sex in outer space is a big no-no according to NASA. Not for professional astronauts at least, but the growing numb... |
Popular Posts / Last 30 Days
-
Visit amazon.com/author/moffat to get free short stories and huge discounts on fantasy books by Charles Moffat. Sale ends on October 20th.
-
CANADA - One of Canada's elite commando units, the JTF2 commandos, have returned home to Canada after serving in Afghanistan for almos...
-
And the similarities don't stop there. Hitler and Trump have a lot more in common. The context in which Adolf Hitler was elected is...
-
CANADA - Interesting Fact: Stephen Harper 's Conservative government in Canada has only shown up to work for 14 days between June 1st ...
-
POLITICS - With Kim Jong-Il dead the future of North Korea has become very uncertain. If you haven't heard already, Kimg Jong-Il, th...
-
CANADA - “Harper does not like StatsCan, that’s what we kept hearing,” says a longtime employee of the agency which handles Canada's st...
-
By Ai Lung Nguyen - February 2011. TECHNOLOGY - It really boils down to a battle for market share... Facebook and Google have been conduct...
-
CANADA - Seriously... who was going to vote for a bald guy named Rocco Rossi??? According to polls 4% of Torontonians were thinking of voti...
-
CARS - Nobody ever steals a pink car. According to a Dutch study which compared the colour of cars being stolen, pink is the safest colour ...
-
I just finished watching Sicko (the 2007 documentary by Michael Moore about American health care, or lack thereof) and it is way better tha...
No comments:
Post a Comment
Comments containing links will be marked as spam and not approved. We moderate every comment. If you want to advertise on this blog it is $30 per link.