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GM says its IPO will be priced at $33 a share

By Jia Lynn Yang

General Motors said that it will price its stock at $33 a share for its initial public offering on Thursday, setting it up to be one of the biggest IPOs in history in a remarkable turnaround for the beleaguered auto giant.

The total offering size could be as large as $23.1 billion, according to GM in an announcement late Wednesday afternoon. At that amount, counting sales of preferred shares, the GM IPO would be the largest ever in the world.

"As we prepare to enter the equity markets, all of us at GM are excited about this historic milestone," said GM vice chairman and chief financial officer Chris Liddell. "We are especially appreciative of those who stood by us through the toughest times, and we are dedicated to creating value for all of our stakeholders."

GM has steadily increased the expected price and share allotment of its IPO in recent weeks as anticipation grew on Wall Street. Initially the company said the shares would be priced from $26 to $29. Later it raised that range to $31 to $33. On Wednesday it said it would increase the number of shares being offered by 30 percent.

The pricing of the stock is critical to the Treasury Department's ability to recover the $50 billion spent on GM's bailout in the aftermath of the financial crisis. The White House has said it is eager to extricate the government from its 61% ownership of the company.

Senior administration officials confirmed Wednesday the government will sell just over 358 million of its shares, raising a total of $11.8 billion. If underwriters decide to sell even more shares, the government will wind up selling 412 million shares, or $13.6 billion, reducing its stake of the company to 33.3%.

GM has thus far repaid or plans to repay $9.5 billion. Thursday's IPO would bring the balance owed to taxpayers to between $26 billion and $28 billion. To break even, the government would have to sell its remaining portion for about $53 a share.

Meanwhile, a report released Wednesday by a nonprofit research group showed that the $80 billion auto bailout saved more than 1.4 million jobs and spared the government a $28.6 billion loss from lower tax receipts and higher public welfare costs. The authors of the report, released by Center for Automotive Research, said this means the government will need to recoup $51.4 billion, rather than $80 billion, to make taxpayers whole.

The largest global IPO ever was in July when Agricultural Bank of China raised $22.1 billion. The biggest in the U.S. was Visa's $19.7 billion sale in March 2008, according to Dealogic.

(Updated at 7:10 p.m.)

By Jia Lynn Yang  | November 17, 2010; 7:10 PM ET
Categories:  Auto industry, Budget and fiscal policy, Corporations  
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Comments

They can't pay us back. This bailout can't work. Everyone had to go bankrupt! It's only fair.

Posted by: Anonymous | November 17, 2010 5:26 PM | Report abuse

Oh brave Mr/Ms Anonymous! How frustrating for you is this that things are working out, even the least little bit.

Posted by: Anonymous | November 17, 2010 5:31 PM | Report abuse

WHo in their right mind to invest in GM or buy their misnomer Volt hybrid car. I'll stick to a quality car instead like my Honda, Toyota and Ford!

Posted by: Templeton62 | November 17, 2010 5:37 PM | Report abuse

What happens to owners of GM stock (now listed as Motors Liquidation Corporation) from before the bankruptcy? Does anyone know? I have a bunch currently valued at about 23 cents per share!

Posted by: retsof | November 17, 2010 5:39 PM | Report abuse

Isn't this pricelss? We get to buy stock in a company that we bought and paid for, by bailing out the unions! GM- stick it- I'll go buy Ford any day of the week and you can kiss my grits, GM

Posted by: Anonymous | November 17, 2010 5:39 PM | Report abuse

WHo in their right mind to invest in GM or buy their misnomer Volt hybrid car. I'll stick to a quality car instead like my Honda, Toyota and Ford!

Posted by: Templeton62

===========================

Short it if you want.

Posted by: Anonymous | November 17, 2010 5:39 PM | Report abuse

Because, you know, it would've been so much better to let all the people who work at GM, and all the people that depend on the jobs that are produced by GM, and all the people who depend on the jobs that depend on the jobs that are produced by GM, go unemployed and become destitute, rather than to have bailed out an automaker who is now posting record profits of 2 billion dollars in one quarter.

So much better to, you know, just make it all fair.

/sarcasm

Posted by: Anonymous | November 17, 2010 5:39 PM | Report abuse

Uh, why do we have to buy the shares if we already own it? Just put mine in the mail. We already paid for them and still are with the low interest rates scammed by the Fed.

Right, a helluva deal. Our Treasury is selling us stock in GM. Now there is something to sink your teeth into. We can certainly trust Geithner.

Who will be the last mullet holding a GM share at $33.00. It won't be the underwriters, for sure.

Posted by: Anonymous | November 17, 2010 5:44 PM | Report abuse

The reason you little folk can't buy GM stock, it's a big boys game.
Thank you American taxpayers.

Posted by: JillCalifornia | November 17, 2010 5:44 PM | Report abuse

It doesn't make a whole lot of sense to me to pay $33 for a GM share, when you could instead buy a Ford motor company share for HALF that, and Ford is a thriving company, not reliant on government TARP loans to rescue it from bankruptcy.

Ford cars are selling better or as well as any Japanese or other competitor, while GM car lots are filled with unsellable cars few people want.

Posted by: tncdel | November 17, 2010 5:44 PM | Report abuse

obama wiped away alot of peoples savings when he gave g.m. to the autoworkers. buy a ford.

Posted by: 12thgenamerican | November 17, 2010 5:45 PM | Report abuse

GM makes quality cars now a days. Toyota quality has regressed during the past few years. I still don't understand why GM stock would be worth twice as much as Ford.

Posted by: Anonymous | November 17, 2010 5:49 PM | Report abuse

On impulse, one might draw a conclusion to score one point up for the Obama administration. However, there is much more hidden with this stock offering that indicates that no one should be claiming victory. One would be sharper to first draw a conclusion that GM better make a historic offering, since it was a historic bail out with what appears to be a bottomless pit of access to money with zero interest. Yes, they had better do something historic, since they used tax payer money and didn't have to pay a cent in interest. So, who won? Looks like China gets a slice of the offering right off the top and since bailed out banks are making the offering and unions got the best of the tax payer for nothing being able to keep their jobs while former stock and bond holders lost their investments. In the market, no one loses money, it is simply transfered to someone else.

Actually, we still don't know where the money went. Was it simply devalued? Deflated? Evaporated into nothing? If we pay more attention to how China has manipulated its currency and is still able to purchase US debt, I guess we have our answer.

Looks like alot of trust has been placed in conservative communist hands. You really trust them that much?

Extend the unemployment says Obama and democrats. China is helping place a pacifier in the mouths of the American Worker, to keep them quite so they can continue to swipe America away with willing politicians who are bent toward distroying the United States.

GM should been let go and that was the right thing to do. Obama is in bed with labor unions who are liberal communists. The sad thing is that conservative communists outnumber them dramatically and there is no way they will win in the end.

Posted by: Anonymous | November 17, 2010 5:52 PM | Report abuse

"Thanks President Barack"

Thanks for saving America's middle class and jobs, who would have thought that as the Republicans didn't do a thing to help American's didn't support this idea, and still don't guess it's proof to America Republicans not interested in helping the Middle Class, and Working Poor, but sure are intested in helping the top two percent and the corporate elite!

..."Once again we have a democrat helping the Middle Class and Working Poor, as the Republicans just hate that, Karl Rove, and Mitch just hate that, and this registered Voter/Vet USAF, glad, glad, glad!

..."Givem hell President Barack Obama, glad, glad, glad, I voted for you, and will do so again "Good Lord Willing" I'm here in 2012!

..."Helping American's has always been the right thing to do, and the President and the Demcorats have proved that, as the "party/NO" can't stand it, and America voted out the only party/people who tryed!

..."Thank you Mr. President, for saving American jobs, when the party/NO/Karl Rove, Mitch voted NO!

...You voted for the wrong people America and the wrong party, now your see how much help you get, from the party/NO!

..."Givem hell President Barack and thanks!

Sincerely, Tom Birchfield, Voter/Vet USAF,
Graduate Student, Masters Program,
Professional Studies,
East Tennessee State University

Posted by: Anonymous | November 17, 2010 6:15 PM | Report abuse

Templeton: From what I've read thus far, there will probably be a Volt in our driveway very soon. Right next to the very reliable but aging GM hybrid we drive now.

As to who will be buying GM stock, the fact that there is a Chinese bank participating in the IPO should tell you something.

Sadly, if the Volt isn't a success, the first electric car you buy will undoubtedly be Chinese. In the US, we piss and moan about it if our government even dares to award small, competitive grants to private industry to promote the development of green technology. The Chinese government, on the other hand, has a 5-year plan for its economy which, if successful, will mean that the next generation of cars (electric) will be from China and no one will ever see a solar panel again that says "Made in USA".

Posted by: exco | November 17, 2010 6:26 PM | Report abuse

Reasons to sit out GM's initial stock offering

http://www.boston.com/cars/news/articles/2010/11/15/reasons_to_sit_out_gms_initial_stock_offering/

Posted by: Anonymous | November 17, 2010 6:28 PM | Report abuse

People like boats toot the loudest when in a fog. That's an expensive fog London.

Posted by: jobandon | November 17, 2010 6:33 PM | Report abuse

obozo any preferred stock set aside for the rats,or will the chicoms have first pick? x billions of our tax $$$$$$$$$$$ then we have the opportunity to pay again? madoff would be proud his scam is still working.

Posted by: pofinpa | November 17, 2010 6:41 PM | Report abuse

Posted by: tncdel | November 17, 2010 5:44

It doesn't make a whole lot of sense to me to pay $33 for a GM share, when you could instead buy a Ford motor company share for HALF that, and Ford is a thriving company, not reliant on government TARP loans to rescue it from bankruptcy

---------------

You sound like the guy who said in 1999 about Google Stock. why should I buy Google at $50 a share when I can get AOL stock for half that, and AOL is a well-run company with a good product that people need and want. LOL

Fortunes change. Markets evolve. At one time, Chrysler stock was trading at $4 a share and was being bailed out by the feds. Five years later, they were on top and their stock was flying.

Good luck with your investment outlook.

Posted by: dlpetersdc | November 17, 2010 6:41 PM | Report abuse

Beware people, some of those great numbers quoted by GM in the past couple of weeks may be tainted - you know how the administration works, so they'll look good if the IPO goes over well.

Posted by: apdseal | November 17, 2010 6:50 PM | Report abuse

GM going public, raising 10s of Billions, hiring 10s of 1000s of Americans at high salaries, is the ULTIMATE proof of what utter complete Lunatics Republicans are, really what enemy of American people they are, because they did not want to provide Government funding to GM which would have resulted in GM going bankrupt and having added 500,000 more to the role of the Unemployed plus 1000 of other supplying companies to GM and Chrysler going bankrupt that would have added another 500,000 to the role of the Unemployed.

But instead due to the capital infusion that GM and Chrysler got from the Government, they are now doing fine and are adding 1000s to their payrolls. In fact if the US Government had not provided capital to GM in 2009 and they had gone bankrupt then American people’s choice for buying cars would have been limited to German & Japanese cars which according to Republican lunatics are “Socialist countries…” since both Germany & Japan have Universal nationalized health care, what Republican lunatics call "Socialism...".

More on this:
http://RealNewsPost.com?n=think.33116

Posted by: Anonymous | November 17, 2010 6:52 PM | Report abuse

I wonder who is buying at 33/share.

GE?

It should be an interesting day. With obama/geithner involved.... we will never know what really happened.

A shame, with zero trustworthiness... they'll just tell us they made x gazillion dollars and that will pay for everything.

Posted by: Anonymous | November 17, 2010 7:01 PM | Report abuse

With GM's record of Quality and Dependability, $33.00 is about $40,00 too high.
But, as P. T. Barnum said "There's a fool born every minute".

Posted by: Anonymous | November 17, 2010 7:08 PM | Report abuse

None of the publicly owned stocks or bonds issued by the former General Motors Corporation, including its common stock formerly traded as "GM", are or will become securities in the General Motors Company ("new GM"), which is an independent company.

All of these securities relate to Motors Liquidation Company and will be treated in accordance with the provisions of the U.S. Bankruptcy Code and the rulings of the Bankruptcy Court.

Management continues to remind investors of its strong belief that there will be no value for the common stockholders in the bankruptcy liquidation process, even under the most optimistic of scenarios.

Stockholders of a company in chapter 11 generally receive value only if all claims of the company's secured and unsecured creditors are fully satisfied. In this case, management strongly believes all such claims will not be fully satisfied, leading to its conclusion that the common stock will have no value.

Also, shares of the IPO by the new GM are being made available to insiders and institutional investors and not to ordinary individual investors. And the hits just keep on coming.

Posted by: BlueTwo1 | November 17, 2010 7:10 PM | Report abuse

Bought a Buick, ONCE. And that was enough. Repairs for defects ran over 1/3 of the new car purchase price. And after almost three years towed it in and bought a GOOD CAR.

Posted by: Anonymous | November 17, 2010 7:11 PM | Report abuse

I thought that GM and all GM shareholders lost all their equity when the company collapsed into bankruptcy.

Now I read that they are selling new common in a company that they no longer own.

How does this work?

Doesn't this just pick the pocket of the American taxpayer for a second time?

The only IPO that would make sense to me is for the US, Canada and labor unions to sell ALL their shares first and recover all previously lost funds.

What am I missing? How can GM sell something it no longer owns (itself)?

Posted by: Anonymous | November 17, 2010 7:32 PM | Report abuse

If the GOP had their way, there would be millions more out of work.

Posted by: Anonymous | November 17, 2010 7:38 PM | Report abuse

This is picking the pocket of the taxpayer once more with a brilliant PR campaign that counts on the American taxpayer not knowing how Wall Street works. When, or if, GM pays back the balance of what was lent under TARP and the other programs, IT WILL BE WITH THE PROCEEDS OF THE IPO - NOT WITH PROFITS! The small investor is likely not to get any of the shares allotted for sale in the IPO, but will gullibly buy-in in 60-90 days when those shares are then free-traded thus guaranteeing a profit for those large institutions buying the IPO shares.

Don't worry - Wall Street had this one figured out quite some time ago and will be rewarded in the short run with underwriting fees, and in the long run with cheap warrants and stock granted in the over-alottment portion of the shares offered.

Posted by: dh2003 | November 17, 2010 8:17 PM | Report abuse

why would you buy stock in a company that has already screwed its shareholders.

Posted by: tonyjm | November 17, 2010 8:24 PM | Report abuse

Oh, thank you General Motors! And thank you for FIFTY YEARS of ETHYL (tetraethyl lead)GASOLINE for which you collected royalties as part of the ETHYL CORPORATION that had nothing to do with manufacturing automobiles! Pay for the resulting health costs from that SPEWD LEAD with the money from your IPO, you #%$@*!!!

Posted by: bduclos | November 17, 2010 8:32 PM | Report abuse

Retsof: I have the same question as you. I have over 100 shares of Motors Liquidation (of course I bought them as GM before the bankruptcy). I am was planing on going to the US Treasury to demand that my MTLQQ be converted to GM, the GM I bought last year. Are you in DC? I would like to form a group to demand that we are compensated.

Posted by: Anonymous | November 17, 2010 8:57 PM | Report abuse

How do you short this thing?

Posted by: phvr38 | November 17, 2010 9:00 PM | Report abuse

I have shares from the old GM that I bought for $34 a piece that were invested for 5 years ... this year I'll get to claim a tax write-off on the losses.

A new GM at $33 again ... no I don't have the money or the ability to play this new game -- go find some other buyer for your junk!

Posted by: free_np | November 17, 2010 9:14 PM | Report abuse

http://www.ashops.us

Wow! This site:

More expensive, fashion, and good products.

Acquisition will have little present.

http://www.ashops.us is a good site.

The discovery like this.

Come and buy! !

Posted by: Anonymous | November 17, 2010 9:35 PM | Report abuse

It doesn't make a whole lot of sense to me to pay $33 for a GM share, when you could instead buy a Ford motor company share for HALF that, and Ford is a thriving company, not reliant on government TARP loans to rescue it from bankruptcy.

Ford cars are selling better or as well as any Japanese or other competitor, while GM car lots are filled with unsellable cars few people want.

Posted by: tncdel | November 17, 2010 5:44 PM

================

You shouldn't even buy stocks. It's not the share price, it's the market cap. you're supposed to compare.

Posted by: Anonymous | November 17, 2010 9:46 PM | Report abuse

What a joke. Any monies so far paid back by GM is from TARP money in escrow ... aka your tax money. Before their collapse approx. $2200.00 out of each car produced/sold went to fund the pension/health plan for retired employees so now with a streamlined, less brand choice GM but the same number of retirees how is GM going to fund the same plan and survive?. Well they just are not going to and all this IPO will produce is a new cash cow for Wall Street to recoup their losses from the mortgage fiasco slow down and the GM brass to return to the 'Old School' excessive pay/bonus structure. Had GM just gone down the tubes then the job losses would have been short term as new tooling would startup in supplier shops to create replacement parts for what GM's were currently on the road as well as other brands ... adapting to change....isn't that what America is good at?. The only thing lost would have been over-paid unionist jobs that were really only worth $15.00/hr at best and over-paid suits that didn't even hold a degree in business management.

Posted by: Anonymous | November 18, 2010 1:00 AM | Report abuse

I could not imagine with all the investment choices available today that someone would by shares in GM. Soros is probably shorting the hell out of it.

Posted by: peterg73 | November 18, 2010 12:15 PM | Report abuse

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