With General Motors widely expected to stage its IPO tomorrow, the maker has announced plans to expand the initial public offering by nearly a third – a move that follows a decision, earlier this week, to increase the anticipated price for the once-bankrupt maker’s new shares.
When the maker initially planned its return to trading on the New York and Toronto stock exchanges it planned to offer 365 million shares to new investors. That number has now been bumped by 31%, to 478 million. Meanwhile, the original price tag for that stock, planned in the $26 to $29 range, will now go for $32 to $33, GM said earlier this week.
The enlarged offering reflects what has been reported to be significant demand for GM’s historic return to public trading, the big investors it was targeting seeking up to five time more than the original IPO plan called for.
But it also reflects a growing desire by GM’s majority owner, the U.S. Treasury, to get out of the carmaking business. Taxpayers will now relinquish 412 million of their 912 million shares, bringing their holdings in what critics have called “Government Motors” down to about a 33% stake.