General Motors, after much ado and a few delays, filed with regulators on Wednesday for an initial public offering in which the government will begin to shrink its stake in the automaker. GM plans to raise funds by selling preferred stock, while shareholders including the U.S. Treasury Department will sell common stock, according to GM’s S-1 filing today, which spotlights the automaker’s work on the upcoming Chevy Volt, its OnStar communication system and its partnership with Google as evidence of its commitment to launching competitive next-generation technologies.
The Treasury Department currently owns $2.1 billion of GM’s Series A preferred stock, plus 60.8 percent of the automaker’s common stock as a result of last year’s controversial $50 billion bailout, and the IPO will allow the government to start shedding those shares. According to a release from the Treasury Department this afternoon, the agency has “agreed to be named [in GM's S-1] as a selling shareholder of common stock,” but it “will retain the right, at all times, to decide whether and at what level to participate in the offering.”
While GM has not disclosed the number of shares or a price range for shares in its planned IPO, the automaker did say in the S-1 that 500 million shares will remain outstanding after the offering. GM is reportedly seeking to raise $16 billion, which would make it the second-largest IPO ever seen in the U.S., behind Visa’s $19.7 billion public offering in early 2008. The offering will also be the second IPO by a U.S. car company since Ford Motor’s public offering more than 50 years ago, after Tesla Motors’ $226 million debut in June.
According to today’s filing, GM will list its shares on both the New York Stock Exchange and the Toronto Stock Exchange. The Canadian and Ontario governments poured $9 billion into the automaker for a stake of around 12 percent last year, and they have been pushing GM to list on the TSX. The Canadian Press reports today, however, that the Canada governments have not decided whether to immediately sell their stakes in GM.
In May, GM reported a $1.07 billion profit for the first three months of this year, compared with a massive loss of $5.98 billion for that period in 2009. Last week, the automaker said its revenue during the second quarter of this year had risen to $33.2 billion, up 44 percent from the same period a year earlier, with second quarter net income climbing to $1.54 billion — its biggest profit in six years.
Expect GM’s IPO to be a markedly different affair than Tesla’s IPO earlier this year. Tesla’s IPO was all about hope for the future of electric vehicles and green car innovation from a Silicon Valley startup that fancies itself a technology developer akin to Apple or Google. GM’s IPO is about overcoming its long and recently tumultuous past, and about delivering a solid business as a manufacturing company.
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