Today, General Motors has filed for its Initial Public Offering (IPO) with the Securities and Exchange Commission (SEC), bringing our favorite automaker one step closer to paying back the Federal Government. This comes to us on the heels of last week’s big GM news, incuding two consecutive quarters in the black as well as Ed Whitacre’s plans to step down as CEO. If you’re a General Motors fan, today’s a good day.
The U.S. Treasury intends to sell only a fifth of its 304 million common shares as part of the IPO, bringing its ownership stake to less than 50 percent. This means that the Feds won’t dump all of their shares or cut all ties with The General at once. Instead, the Treasury will become a minority shareholder, increasing the chances of seeing a full return on its $50 billion investment in the largest automotive company in the world.
GM expects the IPO to go for as much as $16 billion. This would rank The General’s offering as the second-largest in U.S. history – only behind Visa, which raised $19.7 billion in 2008. The IPO will be led by Morgan Stanley, JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc., will include both, common and preferred stock.
The government will only sell common stock while GM will offer preferred shares alongside the IPO. In 2013, the preferred stock will automatically convert to common stock and all owners will be capable of receiving dividends from GM.
General Motors didn’t disclose the number of shares to be sold in the initial offering, or a price for the shares.
Should the IPO be a huge success, it could spur the go-ahead for rumored models, including a Lexus LS fighter from Buick, a BMW 7-Series fighter from Cadillac, as well as many more undisclosed blueprints awaiting launch. The General will also be subjected to more pressure in turning around the unprofitable European business unit.
If nothing else, it’s time to open that online brokerage account you’ve been holding out on. To read The General’s full IPO document, click here.