GM raises the price of its IPO — and taxpayers could benefit
Investors are clamoring to drive away with General Motors Co. stock, and that could mean about $1.2 billion more for U.S. taxpayers.
The automaker on Tuesday boosted the expected price of its initial public stock offering to $32 to $33, from the original $26 to $29.
Investors are hoping to get in early on a hoped-for turnaround in GM’s fortunes. And the frenzy is feeding on itself as investors scramble to take part in one of the year’s hottest stock offerings.
The move raises the value of the IPO to as much as $12 billion. Up to $10 billion of that would go to the U.S. government, which bailed out the company last year and currently holds a 61% ownership stake.
The robust investor demand reportedly also has prompted GM to raise the number of shares being sold by 31%, to 478 million.
Investor frenzies generally haven’t played out well for ordinary Americans. A bear market developed after the dot-com bubble burst nearly a decade ago, and the deep recession followed the mid-decade run-up in the nation’s housing market.
But if the GM offering goes off at $33 a share Thursday, it could mean an additional $1.2 billion to U.S. taxpayers.
The government still faces a long road in getting back the nearly $50 billion it spent rescuing GM, but this is a better start than seemed likely when the company was in bankruptcy last year.
