The GM IPO date is at hand after the company went bankrupt making huge SUVs like the Hummer that no one bought. Image from Wikimedia Commons.

Recently GM announced it would  hold its IPO on Nov. 17. Since then, many have been patiently waiting for the outcome of the initial public offering of stock in the company. The GM IPO has been a hot topic for months.

GM IPO date approaches

General Motors had to give the U.S. Treasury the majority of the company’s shares as part of the terms of the auto bailout and the GM bankruptcy more than 18 months ago. Since the company emerged from bankruptcy, an initial public offering was talked about for months. The company finally announced that a GM IPO would take place, and eventually the GM IPO date was set for Nov. 17. However, according to USA Today, members of the general public are not going to have GM shares made available to them. For an initial public offering, that is actually par for the course, as large investment houses are often given first choice by IPO underwriters. The idea is to get as high a stock price as possible right off the bat. General Motors has been posting consecutive profits all year.

Treasury could shed half its stake

On Tuesday, General Motors announced it was increasing the number of shares by 31 percent, up to 478 million from 365 million, according to Fox News. In the GM IPO, the U.S. Treasury could be selling as much as 50 percent of its stake in General Motors. However , if the share price doesn’t increase by at least 50 percent from the initial price of between $32 and $33 per share, the government will likely take a loss. Since the bankruptcy filing and the auto bailout, General Motors has shed underperforming brands such as Hummer, Saturn and Pontiac to focus on the brands that do well and emerged from bankruptcy shortly thereafter.

Remaining shares to be sold over time

General Motors, and the Treasury, announced previously that government shares would be released over time. Shares sold in the GM IPO won’t pay dividends until the government’s stake is completely gone. However, GM profits have been the largest in years.

Sources

USA Today

Fox News

General Motors posts profits for the first time in years. Image from Wikimedia Commons.

After GM and Chrysler went to the government asking for a bailout, and got one, General Motors has posted a profit for the first quarter of 2010.  It is the first time the company has posted numbers in the black since 2007.  GM recently repaid a portion of the auto bailout it was lent and is thought to be on the path to profitability. Ford Motor Co. also posted recent gains, so it seems auto companies are getting back on track, though they still have plenty to repay from the emergency loans they received from taxpayers.

GM posts first quarter gains

For the first time since 2007, GM has posted a first quarter profit. According to the New York Times, GM garnered about $865 million in profits for first quarter 2010.  It posted revenues of $31.5 billion, and cash flow about $1 billion in the positive.  It’s an overall positive sign for the beleaguered car maker, who previously had to ask the government for more than $50 billion in assistance. One year ago, the company posted losses of $6 billion.

Payment on the loans begun

Weeks ago, GM made payments on a portion of the loans from the Treasury.  The actual loans to GM and to Chrysler were bundled loan packages, and they paid off one of the portions, years before it was due.  While this was touted as a victory by GM and also Chief Executive Ed Whitacre, it was only a payment of $8.2 billion to the governments of America and Canada.

Not out of the woods

Despite the return of GM profits, the company is still heavily in debt.  The loans it received from the U.S. and Canadian governments totaled more than $50 billion. GM has been making obvious positive strides but isn’t completely free yet. At present, the U.S. Treasury still owns more than 60 percent of GM, and those ownership stakes can only be bought by stock offering when the company goes public again. According to the same piece in the New York Times, they will potentially make a public offering by year’s end.