With its return to public trading just days away, General Motors has announced it will increase the price of its new shares and expand the size of the upcoming IPO.
The big jump – from a range of $26 to $29 a share to $32 to $33 – could turn the sale of the U.S. Treasury’s stake into a profit, rather than a multi-billion-dollar loss. Meanwhile, the maker will pocket more money of its own by increasing the number of preferred shares to be sold to 80 million. That will increase the yield from $3 billion to $4 billion.
The news means that the GM initial public offering, which is expected to take place on Thursday, will generate more than $16 billion, just short of the nearly $20 billion record for an IPO, set by Visa in 2008.
The decision to up the share price is no surprise considering the strong response GM and its underwriters have received over the last several weeks as they’ve fanned out to make their pitch to potential investors. The original proposal was reportedly generating as much as five times more demand than would have been available at the lower share price.