Rumormill: Will OnStar Go Public?
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Despite OnStar being a subsidiary to General Motors, the telematics service has been making major efforts to appeal to the entire automotive market with its FMV system that you can find at places like Best Buy. And aside from a brief PR hiccup, the service has been perceived favorably by consumers. So is there a way for the service to raise capital? It’s very, very possible, even though GM is making any public comments on it.
GM Vice Chairman Stephen Girsky has pitched the idea of launching an OnStar IPO to the rest of the company’s command staff, and he’s got the numbers to justify a case. According Forbes, OnStar’s 5 million paying customers generate about $1.5 billion in revenue annually, and that’s good enough to forecast a market capitalization of at least $7 billion. Plus with OnStar’s growth in China, it seems that the only place the telematics service can go is up.
Source: Forbes
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