General Motors IPO to lead the biggest IPO boom by WhiteDigitalMedia


More Info
									General Motors IPO to lead the biggest IPO boom

On the back of mixed auto markets, General Motors’ plan to file an IPO succeeds, making it the
biggest IPO in global history.

General Motors Headquarters

GM IPO: Walking the path of progress

General Motors, one of the world’s leading auto manufactures recently unleashed its stocks in an initial
public offering. The major step taken by this auto manufacturing giant indicates that the company is in
the expansion mode and plans to raise cash through an IPO while earning back its credibility, which was
shaken during the times of recession, pushing the company to file bankruptcy.

GM's IPO could be the biggest since Visa’s $19.7 billion offering released in March 2008, and could raise
up to $20 billion. However, analysts cautioned that its size depends on yet-to-be-tested investor
demand for a well-nourished automaker that has posted profits for two consecutive quarters.

GM Share Trading

Trading in GM shares is expected to start during the Thanksgiving holiday season, sometime between
late October and November 25. A stock offering in late October indicates that trading would begin right
before the November congressional elections. Conversely, the government officials and GM executives
continue to deny the possibility of any linkage of the IPO filing with the elections.
GM also plans to add a stock listing in Toronto along with New York as it would underscore the junior
roles played by Canada and Ontario governments to the US Treasury in keeping GM away from
liquidation. Meanwhile, GM has indicated that the new common stocks will not be sold in the IPO but
the preferred shares can be involved. This kind of an offering is a relatively safer form of equity that
could pull more investors and profit.

A group of leading underwriters will review the performance of GM IPO and the panel will include
underwriters from Morgan Stanley, JPMorgan, Bank of America Merrill Lynch and Citigroup Inc.

Hence, it seems that GM has chosen an ideal path to get hold of its missing assets and reputation. The
IPO filing activity is likely to induce new opportunities and new customers for the company.

General Motors goes Green

General Motors has been striving to bring back the good old days when the company was recognized as
one of the most efficient auto making companies. General Motors’ next plan after filing an IPO is to
become the world’s most fuel- efficient auto manufacturing companies. GM has taken certain positive
initiatives to achieve the set target. The company has adopted a green technology that can increase
the miles-per-gallon figures for the benefit of the customer.

The company is also planning to introduce the hybrid electric cars to meet customer requirements for
the environment-friendly cars that monitor and control the fuel burnout and keep the engines clean.
However, these cars are not very cost-effective and the decision of going green could prove as an ill-
timed mistake for the company. GM will roll out eight hybrid models by next year to help boost the fuel
economy and its own image that is stuck up amid pessimistic consumer perception.

GM also aims to launch diesel-efficient car models in the coming future. At present, the company has
launched 6-speed cars with automatic transmissions with its co-developer Ford Motor Co. The launch of
their 6-speed sedans has replaced their 4-speed transmission models that were running till date.
The road ahead

In the view of analysts, IPO filing has helped GM to recover and grow sales in the US auto market.
Despite marking profits in the home country, the company is going through a rough patch in the
European auto division. As far as global markets are concerned, GM is growing gradually on sharply
lower costs.

GM aims to move more than half of sales volume to global platforms by 2014. This new strategy may
help boost company sales for more than 17% from now and allow GM to cut costs and trim down
complexity in its manufacturing operations. Thus, GM is hopeful about the coming future and fresher
opportunities that may help the company to restore its position with better and sustainable profits.

To top