Wednesday, August 18, 2010

General Motors files for IPO

by Jeremy Korzeniewski

General Motors, the largest automaker based in the United States, has officially filed paperwork with the Securities and Exchange Commission for an Initial Public Offering.

By offering preferred stock along with its IPO, GM is looking to allow the U.S. Treasury (and by extension, American taxpayers) the chance to reduce its stake in the automaker as much as possible. Unlike common stock, preferred stock carries both debt and equity, is rated by the world's credit rating companies and typically has priority over common stock in the event that the company goes into bankruptcy.

According to Bloomberg, the U.S. Treasury intends to sell a fifth of its 304 million common shares as part of the IPO, which will make the government a minority shareholder.

If GM raises the expected $16 billion in its IPO, it will rank as the second-largest in U.S. history behind Visa's $19.7 billion in 2008. The offering will be led by Morgan Stanley, JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. Official GM fine print is available after the jump.

1 comment:

EBM Professor said...

Good post! quite good one.

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