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GM Buying Back 200 mil Shares of Government Stock

US to sell off remaining shares by early 2014.

by on Dec.19, 2012

The sell-off is an "important step in bringing closure" after GM's bailout, said CEO Dan Akerson.

This story has been revised to reflect comments by CFO Dan Ammann and GM North America President Mark Reuss.

General Motors will repurchase 200 million shares of its own stock currently held by the U.S. Treasury, with the White House announcing plans to sell off its remaining 300 million shares within the next 12 to 15 months.

The automaker will $27.50 for the shares it will acquire, a 7.9% premium over the $25.49 closing price on December 18, 2012 – but that is also a sharp discount from the $33 price set during GM’s initial public offering in November 2010. And it means taxpayers will lose billions on the sale.

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“This announcement is an important step in bringing closure to the successful auto industry rescue, it further removes the perception of government ownership of GM among customers, and it demonstrates confidence in GM’s progress and our future,” said Dan Akerson, chairman and CEO of GM.


GM Says it Didn’t Ask Feds to Sell its Stock

Treasury in no rush to "dump" GM shares.

by on Sep.18, 2012

The government plans to look for the most opportune time to sell, a Treasury official stressed.

General Motors is denying a report that it pressed the White House to sell off the remaining shares of GM stock held by the U.S. Treasury.

Sources inside the company insist the two reluctant partners have agreed that they will wait until an acceptable and appropriate time to sell the 500.1 million shares still held as a result of the government bailout of GM that followed the maker’s emergence from bankruptcy in 2009.

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A report in the Wall Street Journal today indicated GM had pressed Washington to sell off that 26.5% stake as soon as possible, but spokesman Greg Martin insists the maker is taking the position that “it’s Treasury’s decision,” much like any other investor. And for now, a top Treasury official said there is no rush to “dump” GM stock.


White House May Hang onto GM Shares Until at Least 2012

But CEO Akerson bets $1 mil on maker’s stock.

by on May.13, 2011

The White House holds its GM stock, and CEO Dan Akerson spends nearly $1 mil to buy more.

Officially, the White House could begin selling off the Treasury’s remaining 500 million shares of General Motors stock once a so-called lockup period expires later this month, but sources are warning the government will likely not make any move until August – and possibly could wait until next year.

With investors wary of automotive stocks at a time of rising gas prices and wavering economic issues – and with GM shares, in particular, being pummeled in recent weeks – the Obama Administration appears wary of making a move too soon, as selling off those shares now could mean a $9.5 billion loss on the GM bailout.

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But while Washington may be wary of what’s happening at the automaker, CEO Dan Akerson appears to be putting his money where his mouth is, investing nearly $1 million to acquire 30,000 shares of GM stock this week, bringing his total holdings to 50,000 shares.  At $31.33 a share — $939,000 in total — Akerson got a bargain compared to those who paid $33 a share when GM launched its long-awaited IPO last November.


GM “Humbled,” And Determined Not To Repeat Past Mistakes, Says CEO

Akerson tells Washington audience of GM’s new goals.

by on Dec.10, 2010

A "humbled" GM CEO Dan Akerson.

A “humbled” General Motors is determined not to repeat the mistakes that led it into bankruptcy, Chief Executive Officer Dan Akerson told an audience at the Economic Club of Washington, today.

It was the CEO’s first public appearance in the nation’s capital since last month’s successful IPO took GM public, again, and began the process of reducing the U.S. Treasury’s holdings in what critics continue to call “Government Motors.”

“We are humbled by our near-death experience,” said the former Navy officer, who took the reigns as GM Chairman and CEO earlier this year.  Akerson joined the General Motors board after the company emerged from Chapter 11 protection in July 2009.

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Akerson traveled to Washington under very different circumstances from his predecessor, Rick Wagoner, who appeared – along with the CEOs of Chrysler and Ford – before a clearly hostile Congressional committee, late in 2008, asking for a federal bailout.  Wagoner was forced out by the White House, in March 2009, as a provision for providing that assistance, which ultimately totaled more than $50 billion.


Underwriters Boost GM Stock Sale By Additional 72 Mil Shares

“Over-allotment” generates additional $1.8 bil for U.S. taxpayers.

by on Nov.29, 2010

GM's IPO officially becomes the biggest ever with the successful sale of another $2 billion in common shares.

The underwriters of General Motors’ recent IPO have exercised an option permitting them to sell another 71.7 million shares, a so-called “over-allotment” worth $2.37 billion.

Along with another 13 million shares of convertible preferred stock, that brings the final tally for the automaker’s initial public offering to $23.1 billion, far exceeding the previous record IPO, the $19.5 billion raised by Visa in 2008.

The U.S. Treasury was able to sell another 54 million of its own shares through the over-allotment, worth $1.8 billion.  As a result of the IPO, taxpayers have now roughly halved their stake in the company critics dubbed “Government Motors,” after last year’s federal bailout.

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The IPO was held on November 18th and initially covered 478 million shares of common stock, worth $15.77 billion, as well as 87 million shares of preferred, worth $4.35 billion – a total just slightly exceeding the 2008 Visa offering.

The convertible preferred shares convert to common no later than December 1, 2013.  They carry a 4.75% dividend rate and a liquidation value of $50 apiece.


GM Global Business Conference Reveals Little New

It is mostly a rehash of previously available info as a run up to an impending IPO. But two key things emerged for taxpayers.

by on Jun.29, 2010

The man whose product development team will ultimately pay back the taxpayer debtors?

General Motors Company today hosted a group of 200 members of the financial community and other stakeholders during a Global Business Conference at its Technical Center in Warren, Michigan.

The event was the first of its kind since the debut of the new company in July 2009 when it emerged from bankruptcy as a taxpayer-owned private firm and former ATT telephone executive Ed Whitacre took over as Chairman.

The conference had all the appearances of a hastily arrange public relations event that was likely constrained in content by an impending filing with the U.S. Securities and Exchange Commission to take the taxpayer held company public.

Once GM files, it will be subject to a “blackout period” on such events until its public offering is complete – a process that is largely outside of GM’s control. Such a filing could come as early as next month when second quarter earnings become available, which the best companies do within weeks of closing, if not sooner.

GM had revenue of $31.5 billion and operating income of $1.2 billion during the first quarter of 2010. GM’s net income attributable to common stockholders was $865 million, resulting in earnings per share on a diluted basis of $1.66. It was the first quarterly profit at the company since 2007, and a necessary prelude to an initial public offering or IPO.

The conference featured a review of GM’s global business, with updates by Chairman and CEO Ed Whitacre, Vice Chairman Steve Girsky, Vice Chairman and CFO, Chris Liddell, and GM’s regional presidents. Vice Chairman of Global Product Operations Tom Stephens provided a review of GM’s global product portfolio, and an early preview of some upcoming products, including the next versions of the Opel Insignia, Chevrolet Malibu, and Cadillac CTS.

Most of it was boilerplate and platitudes, which if bottled could prove to be a great benefit to insomniacs.

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However, two things were notable for close followers of the company. One concerned finance, while the other dealt with product development – two areas that need to work together better than previously if GM is to survive the ongoing “take no prisoners car wars.”


GM Execs To Make Their Case to Financial Community

IPO not on the agenda – but it will be on everyone’s mind.

by on Jun.29, 2010

His TV commercials haven't been a big hit. Will GM CEO Ed Whitacre's presentation to potential investors do any better?

When General Motors CEO Ed Whitacre kicks off a meeting with 200 key members of the financial community, this morning, he’ll be sidestepping what, for most of those on hand, would likely be the most important topic of all: when will the automaker stage its much-anticipated Initial Public Offering.

To date, Whitacre has only said that GM will become a public company once again when the time is right.  But there’s little doubt he’s under significant pressure from the White House, which would like to get back as much of the federal bailout money pumped into the company last year – and as soon as possible.

But sources at GM say the topic of an IPO will be specifically off the table, even as Whitacre, GM Chief Financial Officer Chris Liddell and the rest of the top management team give potential investors a look at what has happened since the automaker emerged from bankruptcy nearly a year ago.

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“Today is very much about giving the financial community a look at the progress we’ve made…from the perspective of our leaders,” said spokeswoman Renee Rashid-Merem, noting that today’s all-day meeting, “is one of the first time the whole team will be together.”

The session is intended to cover a broad array of topics about the way the “new” GM has been reorganized, about the way its finances are shaping up, how it is expanding its global base and how it is reviving its long-troubled product operations, the latter topic a subject for global product operations chief and Vice Chairman Tom Stephens.

This will be CFO Liddell’s first big event since joining General Motors early this year.  He previously served a similar role with Microsoft and, like CEO Whitacre, had no previous automotive experience.    Liddell will address a broad range of topics, according to organizers, but the numbers will be key to many on hand, said various sources who were planning to attend in person or dial in over a conference line.

Among the questions he and others may be asked is how GM plans to weather the apparent slowdown in car sales in recent weeks.  More long-term, the executive team could be asked to give a sense of who will be in charge once Whitacre retires.  The former ATT chairman has openly acknowledged his initial reluctance to take on the GM job and has hinted he probably won’t stay on long after an IPO.

But with the subject of a stock offering so high on everyone’s list of topics, why isn’t it on the agenda?  Probably because GM’s lawyers feel that the subject could run afoul of SEC regulations, cautions Joe Phillippi, of AutoTrends Consulting.  “Initially,” he says, “I thought they would have filed before the meeting, but then they probably couldn’t have had the meeting.”

While Whitacre’s comments, in recent months, have suggested an IPO could be pushed back into 2011, many in the investment community believe that GM will bow to pressure and make it happen prior to the upcoming national election.

“There’s no question they’re going to file and they’re going to file very soon,” Phillippi says he’s willing to bet.  The key will be the company’s second-quarter earnings.  GM did better than expected during the first three months of the year and initial indications are that the about-to-close quarter is also strong, which could, the analyst forecasts, trigger a filing with the SEC “within a matter of weeks.”

Sorting Out GM Stock – Old versus New

As the maker prepares for an IPO beware of the old stock.

by on Jun.23, 2010

General Motors Company holds all of the productive assets.

As General Motors prepares to register with the U.S. Securities and Exchange Commission for sale of stock in the new Company, confusion exists about the old stock of the bankrupt Corporation. It’s worthless.

General Motors Company is the “new GM,” which emerged from bankruptcy last summer. All of GM’s continuing operations and assets are completely out of bankruptcy and are now operating as an independent and separate company called “General Motors Company.” It holds virtually all of the productive assets of the old Corporation. These include the Cadillac, Chevrolet, Buick, and GMC brands, and the plants and other hard assets that those brands need to continue operations. GM Company also owns all of its overseas operations.

General Motors Company posted a first-quarter profit of $865 million, but it wasn’t a strong performance since the profit came from relief from the interest payments on debt that was wiped out in the bankruptcy. The company has repaid $6.7 billion in outstanding U.S. government loans and $1.4 billion to Canadian governments, with money taxpayers advanced to it.


There are currently no shares of General Motors Company for sale to the public and there won’t be until it is given legal approval to do so. It’s also unknown how many shares will be offered for public sale or by whom, or at what price.