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Archive for Thursday, November 18, 2010

General Motors sees rebirth after crash, government control

November 18, 2010

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— The last time General Motors threw a big party was two years ago, for its 100th birthday. Two months later, its CEO was before Congress, begging for bailout money. Now GM is getting ready for another celebration — this time for its future.

GM will be reborn as a public company today with a stock offering, ending the government’s role as majority shareholder and closing a remarkable chapter in American corporate history.

The U.S. government should make about $13.6 billion when GM shares start trading on the New York Stock Exchange. The federal Treasury is unloading more than 400 million shares of GM, reducing its stake in the company from 61 percent to about 33 percent.

The IPO could wind up as the largest in history. GM set a price of $33 per common share on Wednesday, a day after it raised the number of shares it will offer to satisfy investor demand. When the U.S. government and other owners sell their shares, they’ll raise $18.2 billion. GM will raise another $5 billion by selling 100 million preferred shares at $50 each.

Together, the sale of common and preferred stock will bring the deal’s value to a record $23.2 billion.

The stock offering is the latest in a series of head-spinning developments over the past two years for an American corporate icon.

In September 2008, to mark the beginning of its second century, the automaker celebrated in the grand three-story atrium on the ground floor of its Detroit headquarters. GM had seen a lot of changes in its 100 years, said then-CEO Rick Wagoner.

“In fact, it’s changed a lot in the last 100 hours,” he said, referring to the banking crisis, which was just starting to unfold. Two months later, Wagoner found himself in front of members of Congress, begging for money to keep GM alive. Four months after that, he was ousted by President Barack Obama.

Comments

notajayhawk 3 years, 5 months ago

And now we have the president of the United States acting as a car salesman for Government Motors:

http://news.yahoo.com/s/nm/20101120/ts_nm/us_obama_gm

"Obama pauses at NATO summit to tout new GM hybrid"

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Moderateguy 3 years, 5 months ago

Introducing the Chevy "Volt." The world's first production, coal powered automobile.

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booyalab 3 years, 5 months ago

I hope this doesn't mean an end to their strong legacy of crappy cars we know and love.

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Agnostick 3 years, 5 months ago

"BEIJING (Dow Jones)--SAIC Motor Corp. (600104.SH) said Thursday its wholly owned unit SAIC Motor HK Investment Ltd. bought 15,151,515 ordinary shares in General Motors Co.'s initial public offering for $500 million, accounting for about 0.97% of GM's total equity."

http://online.wsj.com/article/BT-CO-20101118-705729.html

Thanks for the update, berrypenders.

A whopping 0.97%... or 0.0097 ... of total equity.

It's an invasion!

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CorkyHundley 3 years, 5 months ago

The Dude said that the recession was over in June of ought 9 so GM will be able to volt ahead of the competition. They should be able to unload a couple 50 million cars in China. Since they bought half a billion bucks worth of shares today, GM is in the clear.

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Agnostick 3 years, 5 months ago

Ouch! There go those pesky facts again. Somebody's "fascist delusion" just went up in smoke...

Automakers Ask for Bailout to Keep Wheels Turning By Scott Reeves Nov 07, 2008 12:05 pm http://www.minyanville.com/businessmarkets/articles/aig-gm-F-American-international-general/11/7/2008/id/19902

Bush Aids Detroit, but Hard Choices Wait for Obama By DAVID E. SANGER, DAVID M. HERSZENHORN and BILL VLASIC Published: December 19, 2008 http://www.nytimes.com/2008/12/20/business/20auto.html

The inauguration of Barack Obama as the 44th President of the United States took place on Tuesday, January 20, 2009. http://en.wikipedia.org/wiki/Inaugura...

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Centerville 3 years, 5 months ago

I wonder how much more taxpayer money will be spent to 'buy' stock to keep the price up. After all, we've only spent the original $49.5 billion to get the unions off Obama's back plus the $9.5 billion to pretend that GM is starting to pay us back. No amount is too high if the purpose is to maintain the fascist illusion.

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Tom Shewmon 3 years, 5 months ago

And speaking of electric cars, for the fun of it, I started a Scottrade account and bought 800 shares of penny stocks in a car charging company---that will install charging systems in stations and QT's and common areas etc and that may turn into an interesting development here in 2-3 years. Also got a nice truckload of penny stocks in a Dallas based small oil company.....hoping for a leverage buyout and they soar to some ungodly amount. This is not any more than I'd blow in a casino in a night...$500 on each stock. It's fun!

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lawrencehatesbusinesses 3 years, 5 months ago

This is wonderful news! Of course, it also coincides nicely with the government's hatchet job of Toyota. Bigger government and government run companies ALWAYS succeed! It is guaranteed! Look at our local government flavor of entities and you will see the same success!

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Tom Shewmon 3 years, 5 months ago

Done deal.....just bought 141 shares at $35.31. Wait and see if they drop down to around $25 and buy up another $5k worth. At least that's what our financial dude says to do. Ain't life grand!

And goodness gracious, someone (and I'm not mentioning any names) is a little grumpy today, no?

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Agnostick 3 years, 5 months ago

This sort of thing was okie-dokie, of course, when Ronnie Raygun slipped a guhvmint teat into Iacocca's mouth...

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rockchalk1977 3 years, 5 months ago

The U.S. spent $49.5 billion to rescue GM last year. The auto maker has returned $9.5 billion; the Obama administration will seek to recoup the rest through the sale of stock over the next couple of years. Translation... after the stock sale today, GM will still owe us hard working taxpayers some money. As usual with this White House, union thugs win and taxpayers lose!

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Agnostick 3 years, 5 months ago

Blessed, Corky(barrypenders), nota, Center, nauseum: If Obama continued with the Bush bailouts, you'd have your knickers in a twist. If Obama had stopped the Bush bailouts and let GM, Chrysler, banks fail, you'd have your knickers in a twist over all the people who lost jobs.

If Obama could eat dirt and defecate diamonds, you'd hate him.

If Obama single-handedly crawled into a narrow cave in the Afghan moutains, and came out holding the freshly-removed head of Osama Bin Laden... you'd hate him.

If Obama increased the size of government, you'd hate him.

If Obama decreased the size of government... you'd still find a way to hate him.

Perhaps the only person you hate more at this moment is me... because I've given you the plain truth about yourselves.

Agnostick agnostick@excite.com

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deathpenaltyliberal 3 years, 5 months ago

Hate to interrupt your circle jerk of contempt, but the fact is the IPO will buy stock with the proceeds going into the US Treasury. So, like with TARP, the taxpayers came out ahead.

And anyone can buy stock, if you bedwetting wingnuts want to to participate in the market.

Blame earlier administrations for letting GM merge into an octopus, but credit President Obama for helping GM and thousands of American employees transition into a profitable company.

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Centerville 3 years, 5 months ago

Blessed, Corky, nota: You'll never see an article like that in the AP. Nor will you see AP explain why only Democrat-friendly entities are given preferential treatment in this IPO offer. Or why taxpayers aren't being refunded. Or why GM was bailed out in the first place.

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Blessed4x 3 years, 5 months ago

So where is the article celebrating Ford's stellar year after NOT taking government bailout money?

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Flap Doodle 3 years, 5 months ago

The lesson is that if your workforce is both highly unionized and big money supporters of Democratic candidates you will be bailed out.

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CorkyHundley 3 years, 5 months ago

The people that bailed GM out, taxpayers, will not get to participate in the IPO. The ultra rich, Banks and Foreign mega rich will get to though.

The Dude is pressing to help the rich. Even pressing to help foreigners. This must be his "policy"

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Tom Shewmon 3 years, 5 months ago

Wonder how the stocks will perform?

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Liberty_One 3 years, 5 months ago

Message to other businesses: screw up all you want, the government will come save you.

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