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How High is Up for GM Stock?

Maker will rejoin S&P 500 “before too long,” says CEO Akerson.

by on May.20, 2013

GM CEO Dan Akerson delivers the commencement address to Notre Dam business grads over the weekend.

Perhaps it’s just a rising tide lifting all boats, but General Motors stock has hit its highest close in more than two years – beating the $33 a share price tag set during its initial public offering in November 2010.

The resurgence comes as the overall stock market charges from one record to another, but also suggests that investors are impressed by the performance of the giant maker which earlier this month announced $865 million in earnings for the first quarter of 2013.

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Though it has now delivered 3 consecutive quarterly profits, GM is still in the “early innings” of its recovery,” CEO Dan Akerson said over the weekend in South Bend, Indiana, where he delivered the commencement speech for Notre Dame business school graduates.  GM is “on the cusp,” said the executive, of regaining its investment grade debt rating back.  Akerson also suggested in his speech that the maker will rejoin the S&P 500 “before too long.”

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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?

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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.

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Discounting Added 100,000 Sales, Claims GM CEO

Not a “predictable competitor,” Akerson says.

by on Apr.20, 2011

GM CEO Dan Akerson: not a "predictable competitor."

General Motors sold as many as 100,000 more cars than it might have, during the first quarter, by unexpectedly increasing its incentives, CEO Dan Akerson said at an industry conference marking the start of the New York Auto Show.

The maker surprised analysts and competitors alike when it boosted rebates and other givebacks by about $400 a vehicle during the early days of the new year, a time when rising demand led some makers to curb their incentives.

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“I don’t want to be a predictable competitor,” explained Akerson.  “I don’t want the other guy to know exactly what I’m doing.”

Industry observers have questioned the move, which cuts into the maker’s cash flow and potential profitability.  But the added demand more than justifies the cost, the GM CEO asserted.

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GM Shake-Up: Liddell Out as CFO

Former Microsoft exec led GM through largest IPO in history.

by on Mar.10, 2011

Chris Liddell steps down as GM CFO.

This is an updated report on the original story posted by TheDetroitBureau.com earlier this morning.

There’s another management shake-up at General Motors, this morning, with Chris Liddell stepping down as the Detroit maker’s chief financial officer.  He will be replaced by Dan Ammann, currently GM’s treasurer.

Liddell’s planned April 1 departure comes as something of a surprise – and for several reasons.  After a series of management shake-ups following its emergence from Chapter 11 bankruptcy, in July 2009, GM’s senior ranks have been relatively stable in recent months, something insiders said was critical if the maker wanted to renew its focus on the business of designing, building and selling cars.

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But Liddell also was considered the key to General Motors’ wildly successful initial public offering.  The company initially expected to sell its new shares for as little as $26, but ultimately boosted the price to $33 – and sold a significantly larger large of the U.S. Treasury’s holdings than originally planned, ultimately raising about $23 billion in the process.

“Chris was instrumental in establishing a strong financial future for the company,” declared GM Chairman and CEO Dan Akerson during a Thursday morning news conference called to discuss the management shift.  Akerson described Liddell as “a catalyst for change” who “created a lower-risk profile” for the automaker after its emergence from bankruptcy.

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Feds Planning Fast Sell-off of GM Shares

Government won’t wait for stock to rise.

by on Feb.25, 2011

GM reports its first annual profit since 2004.

After last November’s successful initial public offering of General Motors stock there were signs the White House might wait to sell off the remaining government-owned shares hoping to maximize the Treasury’s return. But a senior Obama Administration official says the goal is to get out of GM as quickly as possible, even if that means selling at a loss.

“The writing is clearly on the wall that the government is getting out of the GM position,” says Austin Goolsbe, chairman of the Council of Economic Advisors. “The government never wanted to be in the business of being majority shareholder of GM. It was only to prevent a wider spillover, negative event on the economy. So we’re trying to get out of that.”

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Starting with former President George W. Bush, the government has invested $49.5 billion in keeping GM alive – and billions more to bail out Chrysler.  That got taxpayers a 60.1% stake in the bigger maker, though that dropped to 33% as a result of what is generally seen as a very successful GM IPO, last year.

The maker originally was looking at an initial “strike price” of as little as $26 a share but ultimately came to market at $33.  GM stock has since nudged the $40 mark – with some analysts predicting it could hit $50 a share – though it has taken some hits, in recent days, as fuel prices have soared in the wake of the crisis in Libya.

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GM Beats Analyst Expectations With First Profit Since 2004

“We still have a lot to do,” says CEO Akerson.

by on Feb.24, 2011

Still plenty to do, said CEO Akerson, despite GM's first reported yearly profit since 2004.

General Motors Corp. made a profit of $4.7 billion during 2010, including $500 million in net income during the fourth quarter despite a 25% drop in earnings from its Asian operations and continuing losses in its struggling European automotive business.

GM also confirmed Thursday it will distribute a record profit sharing checks averaging $4,300 to 45,000 hourly workers in the United States. The payments, which will cost the GM about $189 million, are substantially larger any GM has distributed to workers since profit sharing was first included in its union contract in 1982.

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“Last year was one of foundation building,” Dan Akerson, chairman and chief executive officer, said, adding that, “Particularly pleasing was that we demonstrated GM’s ability to achieve sustainable profitability near the bottom of the U.S. industry cycle, with four consecutive profitable quarters.

It was the first time GM was profitable during all four quarters of the calendar year since 2004.  The maker subsequently ran up about $80 billion in losses before plunging into bankruptcy in May 2009.  It emerged from Chapter 11 protection two months later, but only after receiving $49.5 billion in federal assistance.

“We know we still have a lot to do,” Akerson said Thursday during a conference call with analysts and reporters.

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Breaking News: GM Reports First Annual Profit Since 2004

$4.7 bil figure further evidence of recovery, maker says.

by on Feb.24, 2011

GM reports its first annual profit since 2004.

General Motors has posted $4.7 billion in earnings for 2010, its first annual profit since 2004, and another indication, the maker said, of its ongoing recovery after emerging from bankruptcy nearly two years ago.

A rebound in the North American market helped fuel the earnings, though GM’s numbers also received a significant boost from China where it is now the largest manufacturer in the booming market.  Concessions from union workers played a significant role in improving the bottom line, with analysts saying GM now has a significant cost advantage over foreign-owned transplant assembly lines.

For the fourth quarter, GM reported net income of $510 million – after taking $400 million in charges for buying preferred stock held by the U.S. Treasury and other one-time expenses – which worked out to $0.31 a share.  Factoring out the one-time charges, GM would have earned $0.51 a share, slightly above the consensus on Wall Street.

For the full year, GM earned $2.89 a share on revenues of $135.6 billion.  During the fourth quarter, revenues reached $36.9 billion, which was also ahead of the $34.3 billion estimated by analysts tallied by FactSheet.

GM ran up more than $80 billion in losses, starting in 2005 and continuing through to its 2009 bankruptcy – from which it emerged only after receiving about $50 billion in federal assistance.  It has since paid off all its outstanding U.S. and Canadian government loans and last November’s initial public stock offering resulted in the sell-off of slightly less than half the federal stake in the automaker.

Click Here forTheDetroitBureau.com’s complete report on the GM earnings.

OnStar Ousts Preuss; Among Other GM Changes

Perry named U.S marketing chief.

by on Jan.18, 2011

Former OnStar President Chris Preuss during a presentation at CES, in Las Vegas, earlier this month.

General Motors launched another round of executive changes, ousting the head of OnStar and placing a new executive in charge of marketing the company’s four “core” brands in North America.

Linda Marshall has been appointed president of OnStar, effective February 1, 2011.  Marshall succeeds J. Christopher Preuss, who has “elected to leave the company” to launch a communications consultancy practice, GM said Tuesday.

“As we continue to evolve the OnStar brand and bring new features to our customers, we believe Linda’s deep experience can take the brand and platform to the next level,” said Stephen J. Girsky, vice chairman, corporate strategy and business development.

The shake-up at the telecommunications subsidiary comes as OnStar begins a big push to expand its customer base – among other things by offering an aftermarket mirror, which it will sell through Best Buy, that owners of non-GM vehicles can use to subscribe to the service.  Preuss launched that new product and outlined other OnStar plans, earlier this month, at the Consumer Electronics Show, in Las Vegas.

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GM Pumps $2 billion in Stock Into Pension Fund

60 million shares for underfunded program.

by on Jan.14, 2011

GM moves to further cut its pension liabilities.

General Motors has taken another big step towards correcting one of its last big financial headaches, contributing 60.6 million shares of common stock into its chronically underfunded pension program.

Worth over $2 billion, the stock has been added onto a $4 billion cash contribution the automaker made last month.  Nonetheless, that still leaves $21.4 billion more that GM must ultimately come up with the cover its pension liabilities.

Immediately prior to the cash contribution, the maker owed $17.1 billion to its U.S. salaried and hourly workers’ pension programs and another $10.1 billion to its various overseas programs.

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Those figures actually might shrink on their own.  They reflect the decline in value of various assets in the pension program portfolios that were slammed by the recession.  As those assets regain some of their value the shortfall could shrink substantially.

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