General Motors Ipo

Some companies will just stay down. That is the case with General Motors. The company had been plagued with shrinking market share and rising cost. These two things ultimately led to the company filing bankruptcy in June of 2009. After getting $50 billion dollars from the United States government and restructuring the company came out of bankruptcy in 2010. So on November 17, 2010 the company had a second IPO.

In the United States there has not been an automaker have an IPO in over 60 years. Considering that the government loaned General Motors $50 billion they were very interested in the IPO and getting their money back. Not mention the billions of dollars that investors lost when the company went under. So the big question that the company needs to answer is “is GM a different and better company”? Before going into bankruptcy the company had tried to cut cost along with eliminated several brands, including Pontiac, Hummer, Saturn, and Saab. Well in fact the company has changed and that was seen when General Motors hit the road to promote its IPO. The demand for their stock was better than expected. So GM raised its IPO price range from 26-29 per share to 32-33. This was great for General Motors and made GM’s IPO the biggest in US history raising over $20 billion.

Due to the size of General Motors IPO, there were several companies that were involved with its underwriting. Some of the banks involved were Morgan Stanley, JP Morgan, CITI, Credit Suisse and UBS. However by the time General Motors filed registration papers with the securities exchange commission UBS was no longer listed. An analyst at UBS sent an email discussing GM's valuation the night before General Motors filed terms for its $13 billion IPO, breaking an SEC rule about not disclosing information about IPOs aside from regulatory filings. This was a huge blow to UBS. Losing its underwriting slot on the General Motors IPO caused UBS to drop three spots to No. 10 ranking in U.S. market IPO league tables.5

The day the General Motors IPO the US government sold 400 million shares of General Motors stock, reducing their overall ownership from 60% to around 26%. This means that the US government has gotten back $23.1 billion of the $50 billion that it invested