General Motors’ initial public offering opened share prices at $33 a piece, and since then, the automaker’s stock has stayed relatively stable. But, recent actions have pushed share prices upward. It appears GM is finally making friends on Wall Street.
Automotive News reported on Sunday that the automaker’s actions have finally begun to unlock value in its stock. CEO Mary Barra has long declared the automaker’s stock is undervalued. Despite record profits and years of high sales, nothing moved the needle for GM.
Now, it’s the technology investments that have traders excited about GM stock. GM shares jumped 13 percent following SoftBank’s $2.25 billion investment into General Motors’ Cruise Automation subsidiary. The increase was the automaker’s largest jump since its IPO in 2010. GM stock is also up nearly 30 percent this past year to $44.45.
Numerous analysts also believe GM stock could reach even higher in the years to come. Investors are banking on GM’s self-driving car strategy and a major Cadillac turnaround to fuel revenue.
Comments
The key points of interest in GM are these points.
Profits are up.
The cost have been cut and continue to be controlled to make the profits even ion a slow market.
Investment of these profits into technology and development. This will lead to things like Honda partnering on batteries and Ford on transmissions that help control cost.
A strong market in China.
The future development of new technologies not only battery but also in steel and composites and electronics. The Autonomous is only a part of what interest Wall St.
One of the strongest SUV and CUV lines in the market.
Success at Cadillac would only be frosting on the cake but it will not hurt them even if they do not exceed expectation.
GM has worked hard to become a leaner company that is being seen more for their technology than just building cars. This is what will help them in the future. The key is they are a MFG being seen as a Tech company were as Tesla is a Tech company that is struggling to be seen as a MFG. Plus GM is paying dividends while doing all this.
Ford and FCA are all trying to jump on the tech wagon but they are far behind and both have yet to control cost. Both will continue to struggle. VW, Benz and Toyota can all work to be seen as tech companies. They all will do well as like GM on the market. They all have deep research departments, They all can make deals to partner with others to sell tech. They also have help control cost other than the Diesel Scandal.
It is no longer just enough to build cars anymore. Those additions to the Tech Center are now paying off and things discovered there will trickle down to all parts of our lives. Kind of like how GM used to work when they made refrigerators, moon buggies and trains. Their advancements lead the industry in cars and it also lead into so many other products.
Most tech companies can not MFG. Most MFGs do not do tech. If you can do both you have a open door to do about anything and control the cost while doing it. this is the blueprint for the future.
You left out that Toyota and Honda are designing ugly cars that are equal parts boring and Japanese Manga.
i’m a bit dubious about the tech wall street seems value so much.
in the next 5 years do you think autonomous vehicles will be a profit generator? how about ride sharing? how about EV’s? how about all that supposed valuable data cars will be producing?
as a shareholder, i’m glad gm is investing in these fields and i hope they continue. but it seems to me the payoff will be at least a decade away. and i’d bet that less than 5 years from now, there will be a recession and car sales will plummet.
all this tech reminds me of the internet in the 90’s. it was a lot of hype. it took another decade for things to mature and sort itself out.
No autonomous is still years off just due to legal issues alone let alone technical.
But EV, autonomous etc are like the Apollo program. It is not the destination but the technology developed to reach the goal.
Th e same happed in the 90’s and it was not the end result but the companies that developed it like Intel etc.
As for ride share it will evolve and grow in the odd urban places. Where I live not a chance. But those who invest first will supply the cars and profit from them as it expands.
Many were critical over the moon shot. But they were the people that did not see the entire picture. The goverment funds were the seed money to spur technology development that not only got us to the moon but got us to where we are today with computers and electronics.
No moon shot there is a good chance we would not be debating this here today.