GM Files For Stock Offering
STEVE INSKEEP, host:
General Motors has begun the process of removing the U.S. government from its car business. Yesterday, GM filed papers with the Securities and Exchange Commission for an initial public stock offering, or IPO.
Michigan Radio's Tracy Samilton reports.
TRACY SAMILTON: The filing doesn't disclose how much stock will be sold, but many analysts believe the U.S. Treasury wants to sell enough to become just a minority owner of GM, and raise 10 to $15 billion. That's a big IPO, and it won't be easy in this economy, says Josef Schuster of IPOX Schuster. He says GM will woo big global investors first to encourage smaller investors to join in.
Dr. JOSEF SCHUSTER (Founder, IPOX Schuster): You line up the interest from funds which are flush with cash, I mean, especially in the Middle East nowadays.
SAMILTON: Schuster's company plans to buy some of the stock, despite the risks. How much investors buy will depend on the price. Schuster says setting that price won't be easy. If it's cheap, the stock will be snapped up in a hurry. That's good, but...
Dr. SHUSTER: If it's too cheap, you know, the company itself and the government, you know, will leave a lot of money on the table.
SAMILTON: The stock sale could happen by November. There will be plenty of number-crunching between now and then to see if taxpayers will get their $43 billion of equity back. But remember the initial in initial public offering. There will be more GM stock sold later, and it could take years for the government to sell off completely.
For NPR News, I'm Tracy Samilton, in Ann Arbor.
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