Nikita Arora's Blog

A little more than a year after being saved from the wreckage heap by a massive bailout from the U.S and Canadian governments, when GM hoped to shine again by issuing an IPO, there were all sort of dilemmas with the Detroit Automaker

http://www.thejakartaglobe.com/afp/gm-files-for-landmark-ipo/391744

The company geared up to sell a stake in itself to investors in a public stock offering, part of an effort to lose the “GOVERNMENT MOTORS” nickname earned after rescue put the company in the control of U.S govt, with a 61% stake with smaller stakes by the Canadian and Ontario governments. And although uncertain economic recovery was a serious question to be considered, Wall Street analysts said the shares might zoom, fueled by signs that the company is headed in the right direction after spending the past 2 years struggling to turn itself around.

And, true to their observation, GM Co’s initial public offering became the world’s biggest at $23.1 billion after underwriters swiftly took up additional shares following last week’s IPO. The added shares vaulted GM past Agricultural Bank of China’s $22.1 billion IPO in July and underscored the strong demand for the taxpayer-rescued automaker’s stock.

According to GM, Underwriters led by Morgan Stanley, JP Morgan Chase and Co., Bank of America, Merrill Lynch and Citigroup Inc, exercised their full option on an additional 71.7 million common shares worth $2.37 billion. The U.S govt bailed out GM for $50 billion after the automaker’s bankruptcy and the IPO caps the first stage of the turnaround that has taken the 102-year-old automaker from near death to an unlikely Wall Street flotation favorite in 2010.

http://www.gmheadlines.com/?brandId=gm&src=gm_com&evar24=gm_com_homepage_rolloverimage_OurC

And although U.S treasury remain GM’s biggest shareholder after the IPO with a third of shares, the strong response of the stock sale reflects growing investor confidence that GM is moving beyond its unpopular, taxpayer-funded bankruptcy with sharply lower costs and higher profit potential !