GM's IPO
On Thursday, the stock opened 6% higher as GM Chief Executive Dan Akerson rang the opening bell on the New York Stock Exchange.
GM sold about 478 million shares Wednesday at $33 each, a price higher than the company and its bankers thought was possible just days ago. An additional 71.7 million shares are expected to be sold by GM's bankers as part of an "overallotment" allowed when sales are stronger than expected. And it sold $4.35 billion in preferred shares.
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Buyers of the GM shares included giant pension and hedge funds as well as GM factory workers and retirees. Among foreign buyers will be China's largest car maker, SAIC Motor Corp., which is GM's biggest partner in the world's largest auto market. SAIC will buy about $500 million of shares for a GM stake of close to 1%, people familiar with the matter said.
Comment: It's going to be interesting to see how GM and F track.
Currently (9:37 am):
F = $ 16.50
GM = $ 35.44
One problem with IPO's is that it hard to judge the true value of the stock just out of the gate! My own prediction (although this is more or less a hunch!) is that GM is worth more in the $ 30 to $ 32 range. We'll see where they are in three months!
Close on 11/18:
ReplyDeleteFord = $ 16.12
GM = $ 34.19
My daughter bought 6 GM shares today
Thought this was interesting
ReplyDeleteGM debut weak, but analysts say that’s good
Some IPO investors often sell the shares they get on the first day to try to lock in a quick profit, Sweet said, calling this strategy “flipping."
GM’s offering was no different, with more than 450 million shares trading on the first day. That means almost the entire tradable stock of the company changed hands on Thursday, Sweet said.
Traders who flip IPO stock are considered “renters,” according to Sweet
“The renters are gone. The owners are now in,” he said.