• Aug 18, 2010


General Motors
, the largest automaker based in the United States, has officially filed paperwork with the Securities and Exchange Commission for an Initial Public Offering.

By offering preferred stock along with its IPO, GM is looking to allow the U.S. Treasury (and by extension, American taxpayers) the chance to reduce its stake in the automaker as much as possible. Unlike common stock, preferred stock carries both debt and equity, is rated by the world's credit rating companies and typically has priority over common stock in the event that the company goes into bankruptcy.

According to Bloomberg, the U.S. Treasury intends to sell a fifth of its 304 million common shares as part of the IPO, which will make the government a minority shareholder.

If GM raises the expected $16 billion in its IPO, it will rank as the second-largest in U.S. history behind Visa's $19.7 billion in 2008. The offering will be led by Morgan Stanley, JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. Official GM fine print is available after the jump.

[Sources: General Motors, Bloomberg | Image: Associated Press/Paul Sancya]

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GM Files Registration Statement with United States Securities and Exchange Commission for Proposed Initial Public Offering

2010-08-18


DETROIT – General Motors Company today announced that it has filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission (SEC) for a proposed initial public offering consisting of common stock to be sold by certain of its stockholders and the issuance by the company of its Series B mandatory convertible junior preferred stock.

The amount of securities offered will be determined by market conditions and other factors at the time of the offering. The number of shares to be offered and the price range for the offering have not yet been determined.

Morgan Stanley and J.P. Morgan (representatives of the underwriters), BofA Merrill Lynch, Citi, Goldman, Sachs & Co., Barclays Capital, Credit Suisse, Deutsche Bank Securities, RBC Capital Markets, and UBS Investment Bank will be the joint book-running managers for the offering. When available, copies of the preliminary prospectus relating to the offering may be obtained for free, by visiting the SEC website at http://www.sec.gov. Alternatively, you may obtain a copy of the preliminary prospectus, by contacting:

* Morgan Stanley & Co. Incorporated, Attention: Prospectus Department, 180 Varick Street, 2nd Floor, New York, New York 10014, telephone 1-866-718-1649, or by sending email to prospectus@morganstanley.com
* J.P. Morgan Securities Inc., Attention: Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717, telephone 1-866-803-9204

A registration statement relating to these securities has been filed with the SEC but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

Forward-Looking Statements:

In this press release and in related comments by our management, our use of the words "expect," "anticipate," "possible," "potential," "target," "believe," "commit," "intend," "continue," "may," "would," "could," "should," "project," "projected," "positioned" or similar expressions is intended to identify forward-looking statements that represent our current judgment about possible future events. We believe these judgments are reasonable, but these statements are not guarantees of any events or financial results, and our actual results may differ materially due to a variety of important factors. Among other items, such factors might include: our ability to realize production efficiencies and to achieve reductions in costs as a result of our restructuring initiatives and labor modifications; our ability to maintain quality control over our vehicles and avoid material vehicle recalls; our ability to maintain adequate liquidity and financing sources and an appropriate level of debt, including as required to fund our planning significant investment in new technology; our ability to realize successful vehicle applications of new technology; and our ability to comply with the continuing requirements related to U.S. and other government support.

GM's most recent annual report on Form 10-K and quarterly report on Form 10-Q provides information about these and other factors, which we may revise or supplement in future reports to the SEC.

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    • 1 Second Ago
  • 65 Comments
      • 4 Years Ago
      I assume that their promise to pay the debt portion of their preferred is about as good as the promise to pay on the bonds that the Obamanation allowed them to default on in the unprecedented bankruptcy That way they could turn over a big chunk of the company to the Union voters that helped Obama gain his throne..at least the Unions kept the contracts in place that put GM in financial trouble in the first place..
      • 4 Years Ago
      1. I am not buying GM stock.
      2. GM is not going to raise 16 billion.

      Those of you who buys GM stock, I wish you all the best.
        • 4 Years Ago
        hahahahahahahaha!!!!

        BEST.
        COMMENT.
        EVER!

        I love it! So true!
      • 4 Years Ago
      This isn't about getting ALL of our money back. If we get all of it back except, say, $2 billion, then the question will be, was saving GM worth the $2 billion cost?

      Given that GM has largely recovered it is pretty clear at this point that investing in GM's future was a good move. Not that anyone could have been certain it was the right thing to do at the time. But we are now past the point of debate on that issue. All those GM employees who are going to be working for the next few years and paying taxes (and not drawing on unemployment) will more than make up for the expected cost of bailing out GM.

      TL;DR

      Huge benefits to economy of saving GM > what looks to be small potential loss if IPO valuation is lower than our investment
        • 4 Years Ago
        Sadly there is one more piece to this GM puzzle.

        What you are talking about is the "NEW" GM.

        The OLD GM that was some trick in bookkeeping is still out there, and the tax payers are still PAYING for the sins of the OLD GM.

        Take for instance the recent 600 million MORE to pay to clean up the old Buick factory abandoned in Michigan.

        We are still forking out money to pay for the OLD GM.
      • 4 Years Ago
      "The U.S. Treasury gave $50 billion to GM, receiving common and preferred stock in return for most of that money. While GM has since paid back almost $7 billion in loans to Treasury, the company's stock will need to reach a total market value of roughly $67 billion in order for U.S. taxpayers to break even on Treasury's common shares.

      That level might be possible -- experts have forecast a market value of between $64 billion and $90 billion. But it is far from certain."

      http://money.cnn.com/2010/08/18/news/companies/gm_ipo/index.htm


      Hmmm. I do believe that anyone who said the bailout of GM was a waste of money should write an apology letter to Obama and Congress. The US gov't has a good chance of making money off the "investment" in GM, and this isn't even touching the surface of the hundreds of billions of economic output that would have been lost had GM gone under.

      Be a man. Admit when you're wrong.
        • 4 Years Ago
        LOL at Wiggy.

        Yeah, the UAW got a more workable contract.

        Obammy made all sorts of private backroom deals, payoffs, strong arming to get his healthcare passed. One of the big way to pay for his socialized medicine was to tax the people that currently have healthcare provided by their employer.

        But guess what, Obammy made sure he provided a loophole so his UAW cronies don't have to pay a tax on their health care. To top it off, I'm guessing no one in the USA has equal benefits to the UAW health care.
        • 4 Years Ago
        Funny bobo.

        You talk about GM repaying the 7 billion. You forgot to mention that the money they used to repay that loan from from ANOTHER pot of money they borrowed.
        • 4 Years Ago
        How much did it cost the stockholders and bond holders of GM for the bailout of GM and the UAW
        GM would have come out of a normal(?) bankruptcy a slimmed down company with a more workable contract with the UAW. To think that the company would have been liquidated is naive, too many assets. Instead Obama bailed out the UAW and kept alive a company structure that may yet not make it...All to protect his Democratic supporters.
        Check the numbers see how much was lost by the stockholders and bondholders. More than the treasury put into the new Government Motors.
      • 4 Years Ago
      Can I have my freaking money back now GM?
        • 4 Years Ago
        XMG, UCJR.
        Yep, I want my money back from them too.
        And I want my money being wasted on all the pork barrel projects all across the USA.
        I want my money being wasted on Corn for fuel.
        .
        .
        .
        .
        .
        .
        • 4 Years Ago
        Why dont you ask your military instead, the government only spent over $600 billion in 2009...
        • 4 Years Ago
        You'd better write to the banks, too... didn't they take about 7 TIMES what GM got?

        Wait... did all of this happen before or after Michael Jackson died?

        I sure miss the King of Pop...
        • 4 Years Ago
        NotThatMatt,

        You are a pathetic GM fangirl. I'm surprised of how many loyal cronies there are here on AB's comment sections...

        You defend your precious wittle GM like a bad mother defends her druglord son.

        It's pathetic on all levels.
      • 4 Years Ago
      So they want the American people to buy stock in something they already own with money we don't have because it was stolen from us to buy the company in the first place. Okay?
        • 4 Years Ago
        Yeah. If GM can't make money. The UAW is still out of touch with reality and sucking the company dry.

        Yes, if they can't make money and run their business, then they do like other businesses, they close their doors.
        • 4 Years Ago
        If you don't want money "stolen" from you, also known as taxes, move somewhere where there are no taxes. I would suggest Somalia.

        Let us know how well that goes.
        • 4 Years Ago
        b-b-b-but socialism!!!!!!

        i suppose you would have rather seen these people lose their jobs, huh?
        • 4 Years Ago
        @grumbles

        "i suppose you would have rather seen these people lose their jobs, huh?"

        Life is hard boo hoo. Millions have lost their jobs. Move on. Get a new job.
        • 4 Years Ago
        Yeah, you can pay the roving gangs of war lords for protection money instead.
        At least they don't give loans to auto companies :)
      • 4 Years Ago
      To all GM fanboys:

      Now is the time to put your money where your mouth is. If you beilieve in GM, invest in it. The majority of the value of a new vehicle comes from suppliers, so the GM's annual sales are more money than their company has ever been valued. If you truly believe in GM, the best way to show it is to buy stock.

      Please buy as much as you can- we want as much of our tax dollars back as possible.
        • 4 Years Ago
        Goooooooooo GM fanboys!
      • 4 Years Ago
      Remember the ole saying: "A fool and their money are soon parted!"

      Anyone dumb enough to "jump" into this IPO at the offering should learn a lesson... typical IPO's go up the first few days (as fools rush in to buy...), then the big guys sell pushing the price down below the offering, then after a few weeks it settles into a range reflecting the "real" value... best to wait and see...

      Fact: Q2//YTD financial results prove Ford (F) ($4.7B) is TWICE as profitable as GM ($2.3B) and Ford has more debt payments, all Ford global operations are profitale, cant say that about GM-Europe, money loser and having 4-CEO's in 18-months does NOT show stability in Gov't Motors... while Ford just continues to announce new "Best in Class" products at a relentless rate... Go Ford (F)!!!!!
        • 4 Years Ago
        Debt doesn't factor into quarterly profit numbers. GM is profitable and has no debt. Ford is profitable and has more than $25B (don't know the exact current number) debt.

        Analysts are expecting GM to be worth $50 - 90B, but time will tell.
      • 4 Years Ago
      Exciting times ahead.
      • 4 Years Ago
      I have my money ready!
        • 4 Years Ago
        @ Andrew L

        If you or your father do not understand how the market works, then please stay out of it. If anyone invests in a stock and isn't fully prepared to potentially lose ALL of it, then they don't have a damn clue what they are doing.

        Buy bonds instead.
        • 4 Years Ago
        BREAKING: GM still producing pathetic quality automobiles!
        • 4 Years Ago
        Sweet, two posts in a row for me to down-rank, Ooophenhiemer.

        You make it so easy!
        • 4 Years Ago
        Andrew, seriously, learn how the stock market works:

        Stocks - You own part of a company. If that company declares bankruptcy, your stock is worthless. It doesn't matter whether it's GM, AA, UA, etc, it's a fact of life.

        Bonds - Some company (or governmental organization) owes you money. You're first in line when the company goes under, since you get yours before stock owners get theirs. Even so, you can only get back as much as the company is able to sell itself for.

        Stock Mutual Funds - You buy one fund that has MANY different stocks. If you have a mutual fund that has 1% of it's holdings in GM stock, if GM goes bankrupt your fund just goes down by 1%. Safer than holding one individual stock.

        Bond Mutual Funds - Same deal, but with bonds (corporate, government, municipalities, etc). Even safer than stock mutual funds.

        Seriously, if your dad had a huge pile of money in one stock, he was asking for trouble, ESPECIALLY if he wasn't doing his due diligence on that stock every week. Sucks, but that's a part of life.
        • 4 Years Ago
        I can not even imagine that any model can be compared with the Corolla models in any way . i am in searching of car with ABS break system

        • 4 Years Ago
        What about all the people who LOST money who had stock invested in them like my father? He lost a TON of money when they went bankrup... what is he supposed to do put more money into them?

        There were a lot of people who got burned by GM going bankrupt and I wouldn't be supprised if that hurts them going forward
        • 4 Years Ago
        Don't we all kinda own some of GM anyway?
        • 4 Years Ago
        when would be the optimal time to purchase this IPO? and through whom? Mrg stanly?
        I would like to try my luck, but know nothing about how and when to IPO's
        • 4 Years Ago
        @ Hazdaz

        He had preferred Stock in GM

        The fact of the matter is that you guys all praise GM for being so great and so awesome yet they screwed many people like my father. And then all of you guys have the NERVE to say stuff like well it's his fault and he should just welcome GM back with open arms... sorry but it does not work like that.

        Tell me if you had 20,000 invested in GM and they went bankrupt and you lost all of that money would you feel the same way? probably not...

        He honestly didn't think that they were going to go bankrupt since they got how much in bail out money? and they still failed...

        he is not the only one... there were THOUSANDS of people who were all affected the same way and they are not going to just come back with open arms

        Will GM do anything to fix what was wrong? absolutely NOT
        • 4 Years Ago
        Ah, but did you(people) recoup your money back from old GM's stock? Investing in a re-dying horse...only a fool's dream.
        • 4 Years Ago
        BREAKING: GM is still a pathetic excuse of an american automaker!

        I hate that term. "BREAKING". More like "obvious".
        • 4 Years Ago
        @ Andrew L

        Yeah, again, you have no idea how the market works, so STOP COMPLAINING. The market is essentially like glorified gambling. And it makes absolutely no difference what particular stock you are talking about either, so you can vilify GM all you want, but that doesn't change the fact that it could happen to any stock. It's that simple. If your Pops had 20k shares and didn't read the writing on the wall, when what more did you want? If he thought it was going to make a rebound, then fine, but at least try to sell 1/2 of it and prevent any further losses. So it's GM's fault for not calling you up directly and telling you what to do?? That's why most people invest in Funds and let someone else manage their money because the average person doesn't get the risks involved.

        What more did you want to happen? The auto market was - and still is - in a rather craptacular position. With a share of stock, you own a piece of the company... when that company goes bankrupt, the stock loses it's value. That's how it works.

        So a bunch of GM shareholders lost money, would you rather have seen the entire company go under for good? That would have involved hundreds of thousands of people out of work, and probably would have pulled Ford down with them, causing even more unemployment.

        YOU don't want to buy GM stock, then don't, but don't start crying about losing all the value of the old stock even though you would have had literally months of bad press hinting you to sell and you didn't bother doing it.
      • 4 Years Ago
      I would like to find out WHEN the IPO actually hits the market.

      This news is about GM filing the paperwork, but any news about when the stock will be actually issued to the public???
      • 4 Years Ago
      The worrisome part of this Government Motors Company mess is that the company isn't worth the $70 billion plus that will have to happen to float this IPO. Ford has a market cap at close of business today of $41.96 billion and there is no way in hell GMC is worth almost double that value. Even the Government stake in GMC overstates the value of the company.

      I don't share the sentiments that GMC has made great strides. Its management is in a continual state of flux, its marketing is still the worst in the industry, and its products have significant flaws with the exception of the Equinox. There is also no significant sign that our tax money has been well spent by GMC - the products that have been launched were in the works ANYWAY and there is no evidence that the post bankruptcy GMC altered the products to improve them. In short, what our dollars did was to give the cowards at GM the out to get rid of underperforming divisions and then to squander money hunting for a finance company and a way to pull Opel back into the fold. Furthermore, I would contend that American taxpayer dollars were used to improve Buick - which is for all intents and purposes, a Chinese company, and the decision to retain a division with lower sales than Pontiac in the United States was based solely on how well that Chinese company did, not on the efficacy of the Buick brand in the United States. I would contend that in order to get the Chinese to underwrite the debt that was needed to be sold to finance this fiasco, the Buick brand was saved because of the impact on Chinese workers, not American Pontiac workers. If Buick had been compelled to spin off the Buick brand it wouldn't have gotten the $50 billion in financing. Now, in order to justify this deceit, Buick is getting vehicles with Sino roots - and China has invested much in GM China.

      In short, no one who rescued GMC with taxpayer or union funds will get all of their money back - except perhaps the UAW which is a payback to the supporters of this regime. The rest of the money might as well have been flushed down the toilet. Right now the $50 billion plus $1.5 billion in interest we've paid on the deficit borrowing for this plan is worth about $10 billion in market value.

      The GM bailout is a huge scam - created to support specific parties who are using the American taxpayer to fund and to pull of this scheme.
        • 4 Years Ago
        The real issue is if the government share after selling their stake is less than the $40B+ remaining from the bailout, how does the 'savings' due to the bailout cut into that shortfall. And by savings I mean the costs the government would have had from the additional unemployment benefits for the hundreds of thousands (or millions) of workers that would have lost their jobs had GM (and Chrysler) just gone under. After all, Ford has stated they probably would have died if that happened, BMW was already saying a recession longer than 2 years would have taken them down, so how is that number estimated? Those saved jobs alone could amount to dozens of billions of dollars in benefit payouts, and there are still tax revenues to factor in for the wages of those jobs.
        • 4 Years Ago
        If it were a huge scam I would think there couldn't be any GM products that are selling well and beating competitors in head to head tests. But there are. Plus their sales are increasing against foreign makes. Plus they are showing profits. Plus they are slowly but surely adding jobs and planning growth and expansion.

        If it is a scam then we are all in on it, as in we, the American people - we are all winning. So what is the point of your rant again?
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