GM IPO largest on record, taxpayers recover billions
The New York Stock Exchanged closed. AFP News reports "GM stocks closed at 34.19 dollars, up 3.6 percent from GM's initial sale price announced on Wednesday, but below session highs of 35.60 dollars a share."
The Detroit News reports the GM executives who attended the opening day for GM stock on the New York Stock Exchange bought hundreds of shares in the company themselves.
GM North American chief Mark Reuss called it an emotional day, saying he was proud to work for GM and thanking taxpayers for giving GM "a second chance."
The News reports the GM execs will head back to Detroit "after today's events in order to attend a private employee celebration at the company's Renaissance Center headquarters."
GM executives rang the bell and played a recording of a Chevy Camaro revving its engine to open trading at the New York Stock Exchange this morning. As of this writing, the stock, bought during the IPO at $33 per share, has jumped to $35 per share in trading. Here's how it's tracking next to Ford's stock (F):
Wednesday, Nov 17th 11:05pm: The new General Motors is setting sail as a publicly traded company, and the U.S. government is no longer a majority owner. GM will start trading Thursday at $33 per share.
The New York Times is reporting that GM's initial public offering (IPO) reduced the U.S. taxpayers stake in the company by half. Billions of dollars were returned to the federal government as big investors snatched up shares. The IPO raised $23.1 billion (the biggest IPO on record).
Last summer, Ed Whitacre Jr., General Motors chief executive said the government should sell all of its stake in one shot, but the Times reports the government's investment was too big to consider one sell off as an option:
...the recently bankrupt automaker will have to build on its revival for the government to recoup its entire $50 billion investment and validate the Obama administration’s decision to keep G.M. from collapsing.
To break even, "the Treasury Department will need to sell its remaining 500 million shares at an average price of $53 each in the months and years to come."
I wrote earlier about a report that analyzed the government bailouts for GM and Chrysler. The authors concluded that even if the government doesn't break even in cash, the bailouts were still worth it as they save billions in lost wages and prevented a larger ripple effect through the rest of the economy.