Linda is biotch...! LOLz JayKay
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Everyone hates Jerele! LOL eom
Bankruptcies November 24, 2010, 5:00PM EST
A Stock Windfall for GM's Creditors
Warrants for 273 million shares may add to a $5 billion haul
By Tiffany Kary and Linda Sandler
Creditors of General Motors' (GM) bankrupt predecessor, who will likely get about $5 billion from the new automaker's $20 billion initial public offering, might be able to buy millions more new shares at a deep discount.
GM's bankrupt estate got 150 million shares, or 10 percent of stock in the new company, to help pay off creditors. At the Nov. 19 closing price of $34.26, that stock is worth about $5.1 billion. So-called old GM has warrants that entitle it to buy about 273 million additional shares at $10 to $18 each, according to the company's Nov. 17 filing with the U.S. Securities and Exchange Commission. The warrants will become even more valuable if GM shares rise. At least one analyst expects they will. "We value the shares of the new GM at $45," says Kirk Ludtke, a senior vice-president at CRT Capital Group in Stamford, Conn.
The estate's creditors received rights to the shares after GM bondholders with about 54 percent of the carmaker's $27 billion in debt agreed to support a plan that swapped debt for equity. The bankrupt company, now known as Motors Liquidation, is still counting up creditors' claims, which totaled $35.7 billion as of Sept. 30, according to its last monthly operating report.
If unsecured claims end up exceeding $35 billion, the estate would get at least 10 million additional GM shares. If claims go as high as $42 billion, creditors could get as many as 30 million new shares, according to the IPO documents. "The stock is certainly worth more than almost anyone thought at the time," says Chip Bowles, a bankruptcy lawyer at Greenebaum, Doll & McDonald in Louisville.
When GM filed for bankruptcy in June 2009, it sold its most valuable assets, including its Cadillac and Chevrolet divisions, to a new company. Unwanted properties, such as outmoded factories and its Saturn division, were left under bankruptcy-court protection and are to be liquidated under a plan that repays loans from the U.S. Treasury and Canada.
While the IPO revenue is a potential boost for creditors, some holders of the old GM's bonds believe they should be getting more money now that the company has been revived. "The big issue that will be debated for a long time is whether the value being raised in the IPO is really value that should have been part of the estate for old creditors," says Michael P. Richman, chairman of Patton Boggs' restructuring practice, who represented bondholders challenging the government's plan for GM in June 2009.
The creditors won't get any stock until they agree on a liquidation plan and a judge approves it. One unresolved issue is General Motors' asbestos liability, which GM's estate estimates at $648 million. A committee of creditors said in court filings that the amount may be 5 to 10 times that much. Lack of consensus on a plan is "delaying distribution to literally thousands of innocent creditors," U.S. Bankruptcy Judge Robert E. Gerber said in a Nov. 22 hearing.
The bottom line: GM's successful public offering is providing money to pay off creditors of the bankrupt company, who have warrants to buy more shares.
Kary is a reporter for Bloomberg News. Sandler is a reporter for Bloomberg News.
http://www.businessweek.com/magazine/content/10_49/b4206054196861.htm
I do believe that equity has a change. imo/eom
Yes, but in this case, it is atty fees. imo/eom
Well, there is money in the Estate, it is just Rosen giving away our money.
Attorney fees pretty much gets paid, even to the detriment of creditors/equity, etc.
imo
Yes and the money comes from the Estate (taken from anyone who is last on the totem pole). imo/eom
it would have been nice if someone asked the court why the biggest single equity group has been silent the whole time and why.
IMO, Bondermand and Co. are in Class 2 and 3. They stand to reap a tax windfall. Who else can use the carry forwards, especially a successful "crook"?
Notice of Stock Elections
http://www.kccllc.net/documents/0812229/0812229101122000000000027.pdf
It tells us the crooks are the ones in Class 2 and 3. The ones who are trying to steal WMI.
imo
If the claim was valid, JPM would have been able to vote on the plan. imo/eom
I thought his favorite color was RED. eom
I don't think they would because it is assumed to be in our favor, equity. We can probably figure it out from the unsealing of the actual unsealed docs, if that happens. eom
No problem, eom =D
I kind of agree with catz in the formality of objecting, but I fully expect Susman if he does so to not show all the juice he has. He is a smart guy and any smart guy knows its best to hold out on your enemies and hit them when it hurts the most.
So my theory is even if we do see something it wont go into great detail or at least no publicly yet... I say yet because a lawyer like Susman should always leave an out for the enemies to come to the table and deal to avoid the cost of further litigation.
Jcpnny: Did you sell the bond?eom
Really? Who is the Queen? ha ha eom
Sorry, guys updated the message. Got it from Flowlogic on Y board. eom
EDIT: I am sorry guys, I took this off of the Y board.
From flowlogic6 on Y
Agreed, I was thinking "really" when I was readying that article. LOL
But ya, your are right, the Union sure wanted same cash to fill their pensions.
We will see how time will treat GM shareholders. At least the majority of the shareholders are institutional (according to the articles).
Good night all.
imo
Really ?
Really?
First day trading of GM deemed a success
Though it rose just over a dollar, Wall Streeters say GM's return to the market was a success
Bernard Condon, AP Business Writer, On Thursday November 18, 2010, 6:12 pm EST
NEW YORK (AP) -- GM's return to the public markets was a success.
That at least is the opinion of some market watchers who track initial public offerings like the one pulled off Thursday by the recently bankrupt General Motors Co. Sure, its stock only rose a little more than $1 from its offering price. But that apparently was plenty enough.
There are three big numbers on the first trading day of a new stock: The IPO price paid by select buyers before the stock begins trading, the price of the first trade and the closing price. The goal: What David Menlow of research firm IPO Financial Network calls a trifecta ---- higher numbers at each step.
General Motors hit two out of three. After being priced at $33 a share in the IPO, the stock opened at $35. It ended the day at $34.19, a gain of 3.6 percent, after trading as high as $35.99 in the first few minutes of trading. Almost 457 million GM shares traded, about one tenth of all trading of New York Stock Exchange shares.
"It's a delicate balance," said Menlow. "If you price the stock to exactly the demand, it's a recipe for failure. The people who got the IPO will be disappointed and look to sell."
And the difference between disappointment and success comes down to pennies.
One widely perceived failure was CIT Group's offering in July 2002. It began trading at $22.50, a mere 50 cents below the IPO price. Two years later, insurer Genworth Financial belly flopped on its first day. Its sin: It opened at 25 cents below its offering.
Under the circumstance, GM put in a solid performance. The fear was that the sheer size of GM's offering would keep investors on the sidelines. The U.S. government and other owners sold 478 million shares late Wednesday, the second biggest IPO dump by a U.S. company in history, according to Menlow. The top prize is held by Agere Systems Inc., which went public with 600 million shares in March 2001.
In the end, traders appeared to handle the onslaught without much trouble.
"We don't want a moonshot," said DME Securities trader Alan Valdez as the stock was drifting lower in midafternoon trading. "Then you worry people might start selling fast. You want to build a base. You want investors for the long term."
For all the attention on the first day, the real test may come in a month. That's when regulators allow stock analysts at banks that helped take GM public to publish reports recommending or panning the stock. Analysts are a notoriously overoptimistic and their reports are viewed with suspicion among professional investors. Yet a report urging people to buy or sell can still move shares sharply.
The stock will need to keep rising for taxpayers to have any hope of getting their $50 billion back from the GM bailout. The government got $11.8 billion selling about 40 percent of its stake in the automaker. To break even, it needs to unload the rest of its GM shares at an average $53 apiece.
That's more than 50 percent higher than the stock closed Thursday.
http://finance.yahoo.com/news/First-day-trading-of-GM-apf-2339978096.html?x=0
No problem, glad to help. eom
Lets hope it appreciates and eventually pay dividends. Great to be a part of history.
And hopefully, those "jerk-off" unions are done selling into the market.
imo
CCYPQ is the bold. I have the RED.
Yes, that is the way I remember it. It was X amount of shares per $1,000.
Also, yes, you can trade your security on the yellow market. Call Etrade as ask for corporate action team or corporate action dept.
imo
GM Corp 9.40% Debs due 7/15/2021 370442AN5 $299,795,000.00 11/15/1990 7/22/1991
GM Corp 8.80% Notes due 3/1/2021 370442AJ4 $524,795,000.00 11/15/1990 3/12/1991
GM Corp 7.40% Debs due 9/1/2025 370442AR6 $500,000,000.00 11/15/1990 9/11/1995
GM Corp Medium Term Notes AG3 37045EAG3 $15,000,000.00 11/15/1990 7/22/1991
GM Corp Medium Term Notes AS7 37045EAS7 $48,175,000.00 11/15/1990 12/21/1990
GM Corp 7.75% Disc Debs due 3/15/2036 370442AT2 $377,377,000.00 12/7/1995 3/20/1996
GM Corp 7.70% Debs due 4/15/2016 370442AU9 $500,000,000.00 12/7/1995 4/15/1996
GM Corp 8.10% Debs due 6/15/2024 370442AV7 $400,000,000.00 12/7/1995 6/10/1996
GM Corp 6 3/4 Debs due 5/1/2028 370442AZ8 $600,000,000.00 12/7/1995 4/29/1998
GM Corp 7.20% Notes due 1/15/2011 370442BB0 $1,500,000,000.00 12/7/1995 1/11/2001
GM Corp 7.25% Q Int Bnds due 4/15/2041 370442816 $575,000,000.00 12/7/1995 4/30/2001
GM Corp 7 1/4 Sr Notes due 7/15/2041 370442774 $718,750,000.00 12/7/1995 7/9/2001
GM Corp 7.375% Sr Notes due 10/1/2051 370442766 $690,000,000.00 12/7/1995 10/3/2001
GM Corp 7.25% Sr Notes due 2/15/2052 370442758 $875,000,000.00 12/7/1995 2/14/2002
GM Corp 4.50% Series A Conv Sr Debs 370442741 $1,150,000,000.00 12/7/1995 3/6/2002
GM Corp 5.25% Series B Conv Sr Debs 370442733 $2,600,000,000.00 12/7/1995 3/6/2002
GM Corp 7.375% Sr Notes due 5/15/2048 370442725 $1,115,000,000.00 12/7/1995 5/19/2003
GM Corp 7.375% Sr Notes due 5/23/2048 370442BQ7 $425,000,000.00 12/7/1995 5/23/2003
GM Corp 8.375% Sr Debs due 7/15/2033 370442BT1 $3,000,000,000.00 12/7/1995 7/3/2003
GM Corp 6.250% Series C Conv Sr Debs 370442717 $4,300,000,000.00 12/7/1995 7/2/2003
GM Corp 8.25% Sr Debs due 7/15/2023 370442BW4 $1,250,000,000.00 12/7/1995 7/3/2003
GM Corp 7.125% Sr Notes due 7/15/201 370442BS3 $1,000,000,000.00 12/7/1995 7/3/2003
GM Corp 7.50% Sr Notes due 7/1/2044 370442121 $720,000,000.00 12/7/1995 6/30/2004
GM Corp 1.50% Series D Conv Sr Debs 370442691 $1,500,000,000.00 12/7/1995 5/31/2007
FYI:
Q: What can holders of bonds that are identified on Wilmington Trust Company's notices expect with respect to payouts? Common stock in New GM, warrants, cash?
A: Persons holding bonds, notes, and debentures that are identified by the CUSIP numbers reflected on the front page of the Wilmington Trust Company notices are unsecured creditors of the estate of Motors Liquidation Company. Following the payment of priority claimants (if not satisfied though the "wind-down" budget provided by the U.S. Treasury), all unsecured creditors, including the bondholders, will ultimately receive a pro-rata share of the remaining assets of Motors Liquidation Company. Following the sale of substantially all of its assets to New General Motors in July 2009, the primary assets held by Motors Liquidation Company consist of (i) 10% of the common stock of New General Motors, and (ii) warrants to purchase up to 15% of common stock of New General Motors on a fully diluted basis. Through the liquidation process of Motors Liquidation Company, bondholders (together with all other unsecured creditors) will ultimately receive shares of the common stock and warrants held by Motors Liquidation Company.
Q: What is the dollar value of claims against the estate of Motors Liquidation Company? If the claims pool exceeds $35 billion, will additional stock be issued?
A: The number and amount of claims against the Debtors is currently unknown. November 30, 2009 was the bar date by which all proofs of claim against the Debtors were required to be filed. In the months following the passage of the bar date, the Debtors have begun the initial phases of resolving claims in order to determine the size of the creditor claim pool. Certain filed claims are likely to be disallowed. In the event that the total allowed general unsecured claims against the Debtors exceeds $35 billion, New General Motors has agreed to issue an additional 10,000,000 shares of common stock to Motors Liquidation Company (for ultimate distribution to its creditors).
Q: When can I expect a distribution from the bankruptcy estate?
A: On August 31, 2010, Motors Liquidation Company filed a plan of liquidation and disclosure statement with the Bankruptcy Court. Copies of the plan and disclosure statement are available on the section of this website entitled "Plan and Disclosure Statement." The plan and disclosure statement have not been approved by the Bankruptcy Court, and such approval is a prerequisite to the making of distributions from the bankruptcy estate. On October 21, 2010, the Bankruptcy Court conditionally approved the disclosure statement pending certain revisions and additional disclosures. To date, however, Motors Liquidation Company has not filed a revised version of the disclosure statement and final Bankruptcy Court approval is still pending. In addition, while Motors Liquidation Company initially indicated that it intended to seek approval of the plan prior to the end of calendar year 2010, no hearing with respect to confirmation of the plan has yet been scheduled. Wilmington Trust Company will provide further information on timing when such information becomes available.
Q: How does the New GM IPO impact the New GM stock held by Motors Liquidation Company?
A: Motors Liquidation Company holds 50 million shares of New GM common stock (approximately 10% of New GM common stock outstanding) and warrants to acquire approximately 91 million additional shares of New GM common stock (approximately 15% of New GM common stock on a fully diluted basis). In addition, if the total amount of allowed general unsecured claims against the Debtors exceeds $35 billion, Motors Liquidation Company may receive up to an additional 10 million shares of New GM common stock. The Debtors have previously indicated that such stock and warrants will be available for distribution to the Debtors' general unsecured creditors pursuant to a plan of liquidation. Motors Liquidation Company had the right to offer some or all of its New GM common stock and/or warrants in the IPO and consulted with the Official Committee of Unsecured Creditors (a representative body for all unsecured creditors on which Wilmington Trust sits) on whether or not to participate. Based upon the then available facts and circumstances, and upon a review of the detailed analysis of its professionals, the Official Committee of Unsecured Creditors determined that it was in the best interests of unsecured creditors to decline participation in the IPO. Among other reasons, the Official Committee of Unsecured Creditors determined that it was in the interests of individual creditors to retain the option to receive New GM securities (and the potential upside from any commensurate capital appreciation) or to liquidate the securities upon receipt for cash. Even though Motors Liquidation Company will not participate in the IPO, it is anticipated that the New GM common stock and warrants distributed to the Debtors' general unsecured creditors pursuant to a plan of liquidation will be freely tradable without registration under the securities laws or inclusion in the IPO.
No distribution to senior unsecured creditors until a plan is confirmed.
My account is still listed as notes.
Q: What can holders of bonds that are identified on Wilmington Trust Company's notices expect with respect to payouts? Common stock in New GM, warrants, cash?
A: Persons holding bonds, notes, and debentures that are identified by the CUSIP numbers reflected on the front page of the Wilmington Trust Company notices are unsecured creditors of the estate of Motors Liquidation Company. Following the payment of priority claimants (if not satisfied though the "wind-down" budget provided by the U.S. Treasury), all unsecured creditors, including the bondholders, will ultimately receive a pro-rata share of the remaining assets of Motors Liquidation Company. Following the sale of substantially all of its assets to New General Motors in July 2009, the primary assets held by Motors Liquidation Company consist of (i) 10% of the common stock of New General Motors, and (ii) warrants to purchase up to 15% of common stock of New General Motors on a fully diluted basis. Through the liquidation process of Motors Liquidation Company, bondholders (together with all other unsecured creditors) will ultimately receive shares of the common stock and warrants held by Motors Liquidation Company.
Q: What is the dollar value of claims against the estate of Motors Liquidation Company? If the claims pool exceeds $35 billion, will additional stock be issued?
A: The number and amount of claims against the Debtors is currently unknown. November 30, 2009 was the bar date by which all proofs of claim against the Debtors were required to be filed. In the months following the passage of the bar date, the Debtors have begun the initial phases of resolving claims in order to determine the size of the creditor claim pool. Certain filed claims are likely to be disallowed. In the event that the total allowed general unsecured claims against the Debtors exceeds $35 billion, New General Motors has agreed to issue an additional 10,000,000 shares of common stock to Motors Liquidation Company (for ultimate distribution to its creditors).
Q: When can I expect a distribution from the bankruptcy estate?
A: On August 31, 2010, Motors Liquidation Company filed a plan of liquidation and disclosure statement with the Bankruptcy Court. Copies of the plan and disclosure statement are available on the section of this website entitled "Plan and Disclosure Statement." The plan and disclosure statement have not been approved by the Bankruptcy Court, and such approval is a prerequisite to the making of distributions from the bankruptcy estate. On October 21, 2010, the Bankruptcy Court conditionally approved the disclosure statement pending certain revisions and additional disclosures. To date, however, Motors Liquidation Company has not filed a revised version of the disclosure statement and final Bankruptcy Court approval is still pending. In addition, while Motors Liquidation Company initially indicated that it intended to seek approval of the plan prior to the end of calendar year 2010, no hearing with respect to confirmation of the plan has yet been scheduled. Wilmington Trust Company will provide further information on timing when such information becomes available.
Q: How does the New GM IPO impact the New GM stock held by Motors Liquidation Company?
A: Motors Liquidation Company holds 50 million shares of New GM common stock (approximately 10% of New GM common stock outstanding) and warrants to acquire approximately 91 million additional shares of New GM common stock (approximately 15% of New GM common stock on a fully diluted basis). In addition, if the total amount of allowed general unsecured claims against the Debtors exceeds $35 billion, Motors Liquidation Company may receive up to an additional 10 million shares of New GM common stock. The Debtors have previously indicated that such stock and warrants will be available for distribution to the Debtors' general unsecured creditors pursuant to a plan of liquidation. Motors Liquidation Company had the right to offer some or all of its New GM common stock and/or warrants in the IPO and consulted with the Official Committee of Unsecured Creditors (a representative body for all unsecured creditors on which Wilmington Trust sits) on whether or not to participate. Based upon the then available facts and circumstances, and upon a review of the detailed analysis of its professionals, the Official Committee of Unsecured Creditors determined that it was in the best interests of unsecured creditors to decline participation in the IPO. Among other reasons, the Official Committee of Unsecured Creditors determined that it was in the interests of individual creditors to retain the option to receive New GM securities (and the potential upside from any commensurate capital appreciation) or to liquidate the securities upon receipt for cash. Even though Motors Liquidation Company will not participate in the IPO, it is anticipated that the New GM common stock and warrants distributed to the Debtors' general unsecured creditors pursuant to a plan of liquidation will be freely tradable without registration under the securities laws or inclusion in the IPO.
He is talking about KY stuff. eom
For you since you are pro-Ford:
Why Ford Is Still a 'Better Buy' Over GM: Analyst
On Thursday November 18, 2010, 12:14 pm EST
Stocks soared at the open and kept climbing on Thursday, lifted by the successful launch of General Motors, which opened at above $35 a share-higher than its initial price of $33 a share. What is the outlook for the automaker? David Silver, equity research analyst at Wall Street Strategies, shared his insights.
"A lot of the problems that were there are gone, but there are sill a few that really irk me about General Motors (NYSE: GM)-Europe, profitability overseas, particularly in China and India, and how they are going to pay for these pensions," Silver told CNBC.
"[GM] said it's going to take about 4 to 5 years," he continued. "They're not getting any money from this IPO, but hopefully they are able to pay off that pension and that's the biggest thing right now."
Silver also warned investors not to get roped into the hype around GM stock.
"If you go through the hype and once all that's into the stock, then you'll see the fundamentals that will push the stock," he said. "And they're not nearly as good as you can see for the Fords, Toyotas and the Nissans of the world because [GM] still has a lot of problems."
Instead, Silver said Ford Motor (NYSE:F - News) is a more attractive investment. Silver has a "buy" rating on Ford and has a $22 price target.
"I like Ford-it still looks like a better buy," he said. "Ford is still making cars that people want to buy."
http://finance.yahoo.com/news/Why-Ford-Is-Still-a-Better-cnbc-2685762748.html?x=0&sec=topStories&pos=4&asset=&ccode=
MTLQQ = Toast, imo/eom
If the hype is there and you are able to get some for a quick flip, may be worth that.
imo
UPDATE 4-GM boosts IPO pricing, offers more preferred shrs
Tue Nov 16, 2010 12:40pm EST
* GM confirms raising IPO price range to $32 to $33/share
* GM IPO now to raise about $12 bln in common stock
* Selling $4 bln preferred stock, $1 bln more than planned
* IPO to give GM $63 bln market value, near US break-even
* GM weighing a bigger offering amid high demand -source (Adds background from source on IPO size, reduced dividends on preferred shares, other details)
By Soyoung Kim and David Bailey
NEW YORK/DETROIT, Nov 16 (Reuters) - General Motors has increased the preferred stock on offer by a third and raised the price for common stock in its landmark IPO, bringing the U.S. government closer to break-even on its controversial bailout.
GM [GM.UL] said on Tuesday it now plans to sell 365 million common shares for $32 to $33 each, raising about $12 billion. The mid-point of the new range represents an 18 percent increase from the previous share range of $26 to $29.
The automaker also increased the size of its preferred stock offering by $1 billion to $4 billion in a move that will strengthen its balance sheet by paying down pension debt -- one of the concerns potential investors had cited heading into the initial public offering.
Including an overallotment provision for both common and preferred shares, the GM deal is now set to raise almost $18.5 billion if it prices at the high end of the new price range.
With GM's advisers expecting excess investor demand even at the higher price range, shareholders led by the U.S. Treasury are weighing whether to expand the number of common shares on offer, a person familiar with the matter said on Tuesday.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
TAKE A LOOK on GM's IPO: [ID:nN11173673]
Former head of US Auto Task force speaks to Reuters
Insider on GM's competitive position:
link.reuters.com/gur55q
http://www.reuters.com/article/idUSN1612529320101116
O M G... Look... They are pumping it up to the $32 to $33 range, up from $26 to $29.
Oversubscribed by about seven times now.
AP Source: GM to raise IPO stock price range
AP Source: Investor demand prompts GM to raise stock price range to $32 to $33 in Thursday IPO
Tom Krisher, AP Auto Writer, On Monday November 15, 2010, 8:25 pm
DETROIT (AP) -- Investor demand for General Motors' shares is so high that the automaker will raise the price range of its common stock to $32 to $33 when its initial public stock offering begins on Thursday, a person briefed on the sale said Monday night.
GM is also planning to sell 9 million more preferred shares than originally expected, the person said.
The final price will be set Wednesday after the stock markets close, but GM intends to announce the new range and the additional preferred shares on Tuesday morning in a filing with the U.S. Securities and Exchange Commission, said the person, who didn't want to be identified because the moves have not been officially announced.
Earlier this month GM said its owners, including the U.S. government, will sell 365 million common shares for $26 to $29 each. The company won't sell common shares, but had planned to sell 60 million preferred shares for $50 each.
But since then, investor demand has been so high that GM and bankers handling the deal have decided to raise the common stock price range and issue more preferred shares, the person said. The preferred stock price will stay at $50, but GM's total cost for those shares will remain about the same because it's reducing the expected dividend rate from a range of 5.5 to 6 percent to between 4.75 and 5.25 percent, the person said.
The preferred shares will be converted to common stock in 2013. Bankers have the option to sell roughly 55 million more common shares, although they have not yet decided to do that, the person said.
Orders for the common shares are now seven times higher than the number of shares being offered, said the person, who expects the banks to stop taking orders for the IPO on Tuesday afternoon, two days before the actual sale.
GM, just 16 months out of bankruptcy protection, has impressed analysts and investors with its third-straight quarterly profit and a prediction of much bigger earnings if U.S. auto sales continue to improve.
Any share price increase would certainly be a boon for GM's largest stockholder, the U.S. government, which is trying to get back the $50 billion it gave GM last year to get through restructuring.
"There is legitimate demand for this," said Scott Sweet, senior managing partner of the research firm IPO Boutique.
GM spokesman Selim Bingol and Treasury Department spokesman Mark Paustenbach would not comment on any possible price increases.
At the midpoint of the current common stock price range, $27.50, the sale would bring in just over $10 billion for the U.S. government and other GM owners, the Canadian and Ontario governments and a union health care trust fund. The U.S. government would get over $7 billion.
But if the share price rises to $33, the total figure jumps to $12 billion, with the U.S. government getting roughly $8.7 billion. The preferred shares could bring in $3.5 billion at $50 each.
By selling some of its shares in an IPO, the U.S. government would reduce its stake from 61 percent to 43 percent. That could drop to 35 percent if bankers take the option to sell more common shares.
That could ease animosity toward GM because of the government bailout, which the company said has irked some potential buyers and hurt its sales.
Ontario Finance Minister Dwight Duncan has said the federal and Ontario governments will sell about 30 million of their shares in GM.
GM, though, can't raise the share price too high because it could exceed limits placed on investors' orders, Sweet said.
Demand for the automaker's shares is rising as its financial outlook improves. Last week, GM announced a third-quarter net profit of $2 billion, bringing its earnings to a healthy $4.2 billion for the year. Also, in presentations to investors, GM said its debt and labor costs have been cut so much that it can break even at the low point in an auto sales slump. When sales fully recover, the company could make $17 billion to $19 billion per year pretax.
The possibility of a price increase comes during a week that could be the biggest for IPOs since 2007, according to investment adviser Renaissance Capital LLC. The IPO market has improved steadily since August 2009. The sector had been almost frozen for nearly a year after massive losses on mortgage bonds upended global credit markets.
Sweet wrote in a note to investors that two other IPOs slated for this week also have more orders than shares, management consultant Booz Allen Hamilton Inc., and the broker-dealer LPL Investment Holdings Inc.
Some of GM's investor demand is coming from overseas, including automaker SAIC, GM's government-owned partner in China, which may buy $500 million worth of shares. GM also has courted investment funds in the Middle East and Europe.
Foreign investment, which is common in the U.S. auto industry, could come with a political backlash because GM stock in the IPO is largely unavailable to individual buyers.
Brokerages such as Charles Schwab and Scottrade, which handle trades for smaller investors, aren't taking part in the GM offering. Fidelity has an agreement with GM underwriter Deutsche Bank to sell shares to retail investors. But to place an order, investors must have at least $500,000 in assets with Fidelity, make 36 trades a year or be a premium investor, which normally is for high net-worth clients.
O M G... Look... They are pumping it up to the $32 to $33 range, up from $26 to $29.
Oversubscribed by about seven times now.
AP Source: GM to raise IPO stock price range
AP Source: Investor demand prompts GM to raise stock price range to $32 to $33 in Thursday IPO
Tom Krisher, AP Auto Writer, On Monday November 15, 2010, 8:25 pm
DETROIT (AP) -- Investor demand for General Motors' shares is so high that the automaker will raise the price range of its common stock to $32 to $33 when its initial public stock offering begins on Thursday, a person briefed on the sale said Monday night.
GM is also planning to sell 9 million more preferred shares than originally expected, the person said.
The final price will be set Wednesday after the stock markets close, but GM intends to announce the new range and the additional preferred shares on Tuesday morning in a filing with the U.S. Securities and Exchange Commission, said the person, who didn't want to be identified because the moves have not been officially announced.
Earlier this month GM said its owners, including the U.S. government, will sell 365 million common shares for $26 to $29 each. The company won't sell common shares, but had planned to sell 60 million preferred shares for $50 each.
But since then, investor demand has been so high that GM and bankers handling the deal have decided to raise the common stock price range and issue more preferred shares, the person said. The preferred stock price will stay at $50, but GM's total cost for those shares will remain about the same because it's reducing the expected dividend rate from a range of 5.5 to 6 percent to between 4.75 and 5.25 percent, the person said.
The preferred shares will be converted to common stock in 2013. Bankers have the option to sell roughly 55 million more common shares, although they have not yet decided to do that, the person said.
Orders for the common shares are now seven times higher than the number of shares being offered, said the person, who expects the banks to stop taking orders for the IPO on Tuesday afternoon, two days before the actual sale.
GM, just 16 months out of bankruptcy protection, has impressed analysts and investors with its third-straight quarterly profit and a prediction of much bigger earnings if U.S. auto sales continue to improve.
Any share price increase would certainly be a boon for GM's largest stockholder, the U.S. government, which is trying to get back the $50 billion it gave GM last year to get through restructuring.
"There is legitimate demand for this," said Scott Sweet, senior managing partner of the research firm IPO Boutique.
GM spokesman Selim Bingol and Treasury Department spokesman Mark Paustenbach would not comment on any possible price increases.
At the midpoint of the current common stock price range, $27.50, the sale would bring in just over $10 billion for the U.S. government and other GM owners, the Canadian and Ontario governments and a union health care trust fund. The U.S. government would get over $7 billion.
But if the share price rises to $33, the total figure jumps to $12 billion, with the U.S. government getting roughly $8.7 billion. The preferred shares could bring in $3.5 billion at $50 each.
By selling some of its shares in an IPO, the U.S. government would reduce its stake from 61 percent to 43 percent. That could drop to 35 percent if bankers take the option to sell more common shares.
That could ease animosity toward GM because of the government bailout, which the company said has irked some potential buyers and hurt its sales.
Ontario Finance Minister Dwight Duncan has said the federal and Ontario governments will sell about 30 million of their shares in GM.
GM, though, can't raise the share price too high because it could exceed limits placed on investors' orders, Sweet said.
Demand for the automaker's shares is rising as its financial outlook improves. Last week, GM announced a third-quarter net profit of $2 billion, bringing its earnings to a healthy $4.2 billion for the year. Also, in presentations to investors, GM said its debt and labor costs have been cut so much that it can break even at the low point in an auto sales slump. When sales fully recover, the company could make $17 billion to $19 billion per year pretax.
The possibility of a price increase comes during a week that could be the biggest for IPOs since 2007, according to investment adviser Renaissance Capital LLC. The IPO market has improved steadily since August 2009. The sector had been almost frozen for nearly a year after massive losses on mortgage bonds upended global credit markets.
Sweet wrote in a note to investors that two other IPOs slated for this week also have more orders than shares, management consultant Booz Allen Hamilton Inc., and the broker-dealer LPL Investment Holdings Inc.
Some of GM's investor demand is coming from overseas, including automaker SAIC, GM's government-owned partner in China, which may buy $500 million worth of shares. GM also has courted investment funds in the Middle East and Europe.
Foreign investment, which is common in the U.S. auto industry, could come with a political backlash because GM stock in the IPO is largely unavailable to individual buyers.
Brokerages such as Charles Schwab and Scottrade, which handle trades for smaller investors, aren't taking part in the GM offering. Fidelity has an agreement with GM underwriter Deutsche Bank to sell shares to retail investors. But to place an order, investors must have at least $500,000 in assets with Fidelity, make 36 trades a year or be a premium investor, which normally is for high net-worth clients.
Seems as if demand is very high for GM. It is (may be) priced outside of its original $26 to $29 range on the upper end.
GM seen pricing IPO above $30 per share: sources
reuters
On Monday November 15, 2010, 3:46 pm EST
By Soyoung Kim and Clare Baldwin
NEW YORK (Reuters) - General Motors Co (GM.UL) is expected to price its initial public offering at a minimum of $30 per share, above the initially proposed range, two people familiar with the matter said on Monday.
A higher per-share price reflects robust investor demand for the restructured U.S. automaker and would cut the expected losses for the U.S. Treasury in the first tranche of the stock sale.
GM's IPO is expected to price on Wednesday and begin trading on the New York and Toronto Stock Exchanges on Thursday. At $30 per share, GM would raise about $10.95 billion in common stock.
Based on a diluted share count of 1.9 billion, a $30 per share price would give GM a market value of about $57 billion. GM needs a market value of roughly $70 billion for U.S. taxpayers to break even on their $50 billion bailout.
Speaking to Reuters in Detroit on Monday, former head of the Obama Administration's auto task force Steve Rattner said GM's IPO will almost certainly price above the top end of the $26 to $29 per share price range it filed for.
"Absent some dramatic change in the world in the next 48 hours, this will definitely price above the range," Rattner said.
The success of GM's IPO, coupled with renewed investor confidence in the auto market, will also help Chrysler's bid to return to the stock market in the second half of 2011, Rattner said.
GM has filed to sell about $10 billion worth of common stock at the midpoint, and $3 billion worth of preferred shares, but is seeing outsized demand even before the order books close.
GM is returning to the public markets a little over a year after a government-backed restructuring, from which the U.S. Treasury emerged as the majority shareholder with a 61 percent stake.
The government-backed restructuring was designed to leave GM with sharply lower costs and higher profit potential.
GM's IPO is expected to be the second-biggest U.S. IPO after Visa Inc (NYSE:V - News) and one of the biggest IPOs of all time, globally.
GM is unlikely to file an amended prospectus with a higher price range, the sources said.
China's SAIC Motor Corp (Shanghai:600104.SS - News) is set to take at least a 1 percent stake in GM as part of the IPO, one source said.
While other automakers have expressed interest in taking a stake in GM's IPO, SAIC will be the only automaker to buy into the offering, that source said.
(Reporting by Soyoung Kim, Clare Baldwin in New York and Philipp Halstrick in Frankfurt, additional reporting by James Kelleher in Detroit; Editing by Phil Berlowitz and Matthew Lewis)
http://finance.yahoo.com/news/GM-expected-to-price-IPO-rb-2174481115.html?x=0&sec=topStories&pos=main&asset=&ccode=
I know, I was just messin with you. Your right though, the Unions got the better end of the stick than the Creditors did.
BTW, according to the articles, GM's IPO is oversubscribed by 5 times the amount of shares available and the majority of the shares are going to institutional holdings.
So it may not be time to short if demand is that high.
BTW, everyone else, MTLQQ is NOT part of the new GM nor the IPO. Just in case anyone gets confused.
imo
New shares will be GM in the US and in Canada, the new symbol will be GMM.
imo
Fyi: if anyone is interested, I spoke to the trustee or wells fargo legal dept. They stated that they called the debtors because holders of huq have not received their packages while p and k received them a while ago. This may have been the reason for.the extension.
Sorry, typing from phone.
Imo
Sorry, I don't know when ccypq will get their shares.
I do know that the bk estate need to.distribute to direct owners of senior/union/general unsecured creditors first. Then you have to wait for the trustee of ccypq to distribute.
So I don't know, may have to contact ccypq trustee, but they will tell they have to wait for distribution from bk gm first.
Sorry, typing from my phone.
Imo
Those are Rosen's wording. Everything belongs to the Debtors/Estate until it is distributed.
The question is where does the buck stop...
I hae to get back to work now.
have a nice =day all.
imo
I understand what you are saying about the change in ownership, but another entity can take over the ENTIRE newly emerged WMI entity and utilize the carry forwards and NOLs.
Also, the re-organized entity was alleged to be in the re-insurance business, not banking.
remember, the new entity will not have to pay taxes for about 20 years forward. That money that was suppose to be directed to the IRS, belong to the first line in equity, preferreds.
If there was not carry forwards/NOLs, the money would have gone to the IRS.
imo