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Treasury Rushing to Sell Off More GM Stock

Maker’s shares gets a bump as it prepares to rejoin S&P 500.

by on Jun.05, 2013

GM stock is showing strong momentum after being in the doldrums most of 2012.

While the Treasury Department’s self-imposed deadline to dump its remaining General Motors stock is still nearly a year away, the government plans to benefit from rising prices by putting another 30 million shares on the block this month.

The announcement comes a day after word came that General Motors will rejoin the closely watched S&P 500 stock index for the first time since it filed for bankruptcy in 2009. The maker’s shares have been surging in recent weeks and are now trading above GM’s November 2010 IPO price of $33 a share.

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The government isn’t alone in seizing a potential opportunity. Another 20 million GM shares will be sold by the UAW Retiree Medical Benefits Trust. Commonly known as a VEBA, it received stock in the wake of the maker’s 2009 bankruptcy.


GM Rejoining S&P 500

Strong sales, earnings buoy domestic auto stocks.

by on Jun.04, 2013

Investors have been buoyed by strong sales of GM's big trucks - the 2014 version of the Chevrolet Silverado shown here.

Barely four years after emerging from a bankruptcy some thought it might not survive, General Motors is once again being seen as a barometer of the American economy, the maker rejoining the S&P 500, a key stock market index, after the New York Stock Exchange wraps up Thursday trading.

GM will replace H.J. Heinz Co. on the S&P 500, according to the S&P Dow Jones Indices. It comes as the latest in a series of endorsements for the Detroit maker, including recent debt ratings upgrades, and follows a series of strong earnings reports and U.S. sales gains.

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The move is expected to help further boost the share price of GM which has already experienced a more than 25% gain since early April. But it’s by no means alone.  Cross-town rival Ford Motor Co. has jumped by an even greater margin in recent months, as has Fiat S.p.A., the Italian automaker that now owns a controlling stake in Detroit-based Chrysler Group LLC.


One Year Later GM Stock on a Sharp Decline

Share price barely half initial expectations.

by on Nov.15, 2011

Despite recent earnings GM stock is getting hammered by investors.

A year after it made its return to public trading, General Motors’ stock is being hammered by investors, the market driving shares of the once-bankrupt automaker down by a third of what it debuted at in November 2010.

GM shares have fallen sharply in recent weeks, though it has rebounded slightly this week, but at around $22 a share the stock is still off by nearly a third from its IPO price – and down by more than 40% from its 52-week peak.

“What we are looking at is an increasingly challenged economic environment going forward with a lot of uncertainty,” GM Chief Financial Officer Dan Ammann said after the maker announced a $1.7 billion profit for the third quarter of 2011.

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GM is solidly back in the black after rolling up tens of billions in losses during the years leading up to its 2009 filing for Chapter 11 protection – from which it emerged only after lining up roughly $50 billion in federal aid.  The company says it ended the most recent quarter with $33 billion in cash and nearly $6 billion more in credit lines.  It has meanwhile seen its share of the global automotive market climb to 11.9%, up from 11.4% a year ago.

So, what’s not to like?


Delphi Files for IPO

Once-bankrupt supplier hoping to raise millions, possibly billions, through stock offering.

by on May.31, 2011

Delphi CEO Rodney O'Neal prepares to take the supplier public again.

Delphi Corp., which endured the longest corporate bankruptcy in U.S. history, has filed with the Securities Exchange Commission asking for permission to sell shares through an initial public offering that plays up the company’s potential for growth in China and other overseas markets.

Delphi filed for bankruptcy in 2005 in a bid to scrap what it described as an unsustainable business model that included a heavy reliance on its former parent, General Motors, and a large manufacturing base in the United States. The bankruptcy wiped up Delphi’s old shareholders and left the company’s salaried pension fund in the hands of the Pension Benefit Guarantee Corp.

The Troy-based automotive supplier spent four years under Chapter 11 protection before emerging from bankruptcy in October 2009 with a much smaller manufacturing presence in the U.S. and a focus on supplying high-tech componentry, including safety equipment, fuel-management and electronics.

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The new Delphi is now counting on growth in the automotive market in the next few years to impress would be investors.

Global vehicle production is forecast to grow at a compound annual growth rate of 6.8% from 2010 to 2015. In the near-term, the mature markets, including North America and Western Europe, are expected to grow at 3.3%, from 2010 to 2015, for an increase of approximately 6.9 million units, while the emerging markets are forecast to grow at 10.3%, during the same period, for an increase of approximately 22.2 million units.


General Motors IPO Now Could Be Largest-Ever

On track to raise as much as $23 billion.

by on Nov.18, 2010

Judgment day on Wall Street for GM.

General Motors’ eagerly-awaited Initial Public Offering is now on track to be the largest first-time stock sale in history.

The maker, which only emerged from Chapter 11 protection 16 months ago, now estimates the public offering of common and convertible junior preferred stock will raise between $20.1 billion and $23.1 billion if the underwriters’ over-allotment options are fully exercised.

“As we prepare to enter the equity markets, all of us at GM are excited about this historic milestone.  We are especially appreciative of those who stood by us through the toughest times, and we are dedicated to creating value for all of our stakeholders,” proclaimed GM Vice Chairman and Chief Financial Officer Chris Liddell, finally breaking the SEC-imposed silence hours before the maker’s stock offering was set to go on Thursday.
Initially taking a conservative approach, GM intended to price the opening shares at $26 to $29 – even then exceeding the guess of its more conservative underwriters.  That would have raised between $10 billion and $12 billion, with the U.S. Treasury – the largest stakeholder – reducing its holdings from 60.1% to around 40%.

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But going into the final days before the IPO it became clear demand had far exceeded expectations, leading GM and the government to agree to expand the number of shares on the block by a third – to 478 million – and at a boost price of $32 to $33 each.

The mandatory convertible junior preferred stock portion of the offering, intended to raise cash for GM itself, was bumped up from 60 million to 80 million shares.