Detroit 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.