On June 1 2009, a giant auto-mobile manufacturer declared for bankruptcy. And yes, the company is a 101 years old company that represent the “heart and soul” of the United States.
General Motors filed for chapter 11 (or a term that’s being used these days to declare that your company is bankrupt) because the company had some financial matters that were not dealt with poise.
GM was given a bailout (government intervention type of help) of billions of dollars to regain its prominence in the automotive industry.
Couple of months after GM paid all their debts to the U.S. Treasury and Canadian government with $4.7 billion and $1.1 billion dollars respectively, GM made the initial public offering (IPO). It is their first time in offering the company’s share to the public.
In my opinion, GM is currently making a wise financial decision as they will get more capital from offering stocks to the public. It means that GM has more capital to regain its distinction as one of the biggest auto-mobile manufacturers.
Now since GM has bigger capital it means that they will also have bigger stake in their hands. They should not get careless with the financial matters as they now currently holding on to the public’s money.
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