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

Bye-bye Saturn cars! Image from Flickr.

People shopping around for cars and auto loans should take notice: You might have an opportunity to to get a brand new Saturn car for a used-car price. The same thing goes for Pontiacs.

General Motors is discontinuing both brands, so Pontiac and Saturn cars are bascially going into fire sale mode now. I am still trying to understand exactly how this sale works, so perhaps someone out there who is more business savvy could leave a comment to fill in the missing information.

Incentives plus price slashing

First of all, GM says it will pay dealers “$7,000 for every new Saturn or Pontiac on their lot that is moved to rental-vehicle or service-vehicle fleets operated by the dealers,” says the Wall Street Journal. So, basically, GM will pay dealers to take ownership of the cars. So that’s weird and backward. Right?

Then, dealers must label these cars as “used” because technically the dealers are the first owner, not the customer. Of course, most of the cars will not actually be used, and they’ll still have zero miles (or just test drive miles) on them.

A little help?

So, what am I missing here? This strategy really makes no sense to me. Why doesn’t GM just give bonuses for Pontiac and Saturn cars sold? Why not just slash prices instead of going through the process of justifying and slapping a “used” label on there?

I’m still waiting for this to click. The brands are both being discontinued, so it can’t be for the purpose of maintaining value attached to the Pontiac and Saturn names. I’m at a loss. Let me know what you think.

The bottom line

Anyway, regardless of exactly what GM and its dealers are doing and why they are doing it, you could be able to buy Pontiac and Saturn cars for super cheap, so if you’re thinking about getting a new car sometime soon, you might want to set your plan in motion sooner rather than later.

An Aerial view of the Silverdome. From Wikimedia Commons.

The Pontiac Silverdome, located in Pontiac (duh) Michigan, just outside of Detroit, has sold for a cool $583,000.  An entire sports arena, for between the cost of two and three average homes in America – that’s getting some big-time real estate on the cheap.  One wonders if the new owners will ever need mortgage loan modification.  It was bid on at auction by a private Canadian Real Estate firm out of Toronto, whose name isn’t available presently. They delivered the winning bid, but the sale isn’t final yet.  According to an article from the Detroit Free Press (See: http://freep.com/article/20091116/NEWS03/91116065/1318/Canadian-firm-submits-winning-bid-of-583000-for-Silverdome), it was costing the city of Pontiac about three times that much just to maintain the place per year, and the Detroit area isn’t exactly the land of milk and honey lately.

The former loud and proud home of Detroit Sports

A local college professor and high school sports star, C. Don Davidson, was the lynch pin.  He had grown up in the Detroit area and returned to the Detroit area in 1965, surprised to see the Pontiac area having declined since his absence.  He thought it would be a dandy idea to build a stadium for the Lions.

In 1966, he was hired by the University of Detroit in the architectural department.  (He held a Masters in Urban Planning and Architecture, and previously had helped design Jacksonville International Airport.)  His big project was an urban renewal of Pontiac, including a sports stadium.  He began with talks with William Clay Ford, owner of the Lions for a move.  By 1970, Pontiac was approved as the site for a new stadium, and he was hired as chief project designer by O’Dell, Hewlett and Luckenbach, an architectural firm.  The stadium was completed in 1975 – at a cost of almost $56 million – as the new home of the Detroit Lions.  They had previously been sharing Tiger Stadium with the Detroit Tigers, as was common even back then for professional football teams, and by fall 1975, the Lions’ new home was open for business as Pontiac Metropolitan Stadium.

Why “Silverdome?”

The top of the stadium was made of fiberglass coated with Teflon, which is white to the naked eye, but silver with reflection from the sun.  The roof was entirely supported by air pressure within the stadium.

From the ’70s until recently

In 1978, the Detroit Pistons moved in, and shared the building with the Lions until 1988.  It was the largest (it seats over 93,000; 80,000 for football) and loudest stadium in the NFL until 1997, and it’s still the third-largest stadium in the U.S.  (FedEx Field and Cowboy Stadium are second and first, respectively.)  The Lions moved out in 2001 to Ford Field.  It was largely empty afterward, though the parking lot was used as a drive-in cinema from ’03 to ’06.

The Present

The Silverdome has been host to many events, including WrestleMania III, the sporting event with the largest attendance ever (the record still stands). It’s also been host to legions of concerts – you name the huge band, they’ve played there.   By October 2009, the city of Pontiac put it up for auction.  The new owners, who will have a very reasonable mortgage on a HUGE building, plan to use it to host Major League Soccer games.  Granted, they paid more than a few payday loans, but they got an incredible deal.