GM just filed papers today to begin it’s IPO or intial public offering, which would allow the Federal Government to sell down it’s ownership of the company. As of this post GM has not announced how many shares would be offered, nor the asking price. Industry experts liken the IPO to VISA’s in 2008, which netted the company around $19 billion. But will consumers or investors bite the bait?
Consumers are still a bit shy when it comes to buying GM products, at least people I speak with. Everyone understands, yet not everyone likes the idea of bailing out GM employees or the company itself. After all, who is going to come bail out my job if it were to fall on hard times? No one. My question is, have people forgot about this?
No doubt there will be a number of investors looking to jump on the opportunity to own one of the largest car makers in the world. Yet, if GM gets too greedy with the asking price or number of shares being offered, it may just back fire. Analysts close to GM feel that hope that the IPO will generate somewhere between $10 to $15 billion. Next, the companies history will be taken into consideration, which would typically make any investor balk.
Consider this, GM has lost $88 billion in the 4 years leading up to their bankruptcy!
The $10 billion generated from the IPO will just be a drop in the bucket and hemorrhaging money like that will just make it a poor buy. Obviously GM has been making some large steps in cutting costs, eliminating factories and jobs, but I still just don’t feel they have their feet firmly planted. Perhaps another year from now would be a better time for the IPO? Meanwhile, how’s that Ford stock doing?