GM Files for an IPO One
Year after Bankruptcy
We are trending GM's request for an IPO not just because GM owes the taxpayers alot of money, but because this could be one of the biggest IPOs ever. This attempt to raise capital could be the key to repaying the bailout money extended by the federal government just over a year ago.
GM's filing with the U.S. securities regulators didn't reveal how many shares would be issued or their expected value or range. The several hundred page prospectus is incomplete and a PDF of the document can be found here.
"If GM is valued in that $60 billion to $70 billion range, that gets the taxpayer paid back. But the question is, is that achievable for a company that is a year out of bankruptcy...?" said Brad Coulter, director of O'Keefe and Associates.
Scott Sweet, senior managing partner of IPO Boutique, agreed GM has a lot to prove before investors should consider it a worthy investment and told CNBC, "They still have problems and their problems are large. One of them specifically is in Europe. They missed the chance to sell Opel. As a result, they're losing several hundred million dollars. It's an ongoing problem and it's an albatross right now. They're likely only going to be able to get dimes on the dollar for Opel now. They brought in all these new managers and they still couldn't clean it up."
Trading in GM shares is expected to start after late October. A stock offering in late October would mean trading would start just before the November congressional elections. The Obama administration wants to pitch the $50 billion GM bailout as a financial success in the face of Republican political opposition.