The Dow Jones ticker in New York's Times Square displays news about General Motors stock, Wednesday, Nov. 17, 2010 in New York.
In one of the biggest initial public offerings in US history, GM is on track to raise more than $20 billion today. The stock will go on sale at $33 a share.
The sale will drop the US government's stake in GM from 61% to 37%. At $33/share the government won't make any money from its investment in GM, it will need to sell the rest of the stock it holds at $53/share over the next few years to recoup the $49.5 billion it invested in the company to keep it from going bankrupt. The government has to wait six months before it can sell more shares.
The government has insisted that a large proportion of GM stock be made available to "retail" investors, that's people like you and me. The idea was that it shouldn't be just institutional investors who have access to an IPO made possible by tax dollars.
Most analysts say they expect the IPO to jump 10-20% today, a bump that most IPOs get. But not everyone is jumping on the GM bandwagon, from the WSJ:
James Early, a senior analyst at the Motley Fool, says GM won't fool him twice. "The only way I'd touch GM is with a cold, dead hand severed from my lifeless body," he says. "GM has lost more money than it's made for shareholders over its life. If it's proven one thing, it's that it can destroy shareholder value."