With the new, streamlined General Motors Co. now out of bankruptcy, attention has turned to when the government-owned automaker will try to launch an initial public offering. And while its intention to do so is clear, the particulars of an offering are anything but.
The company might have provided a clue about its plans in a
form 8k filed with the Securities and Exchange Commission late Friday. Numerous
media reports quoting the filing declared GM intends to offer stock to the public by July 10, 2010, the one-year anniversary date of its exit from bankruptcy.
The company
in a statement said the 8k filing was designed to summarize GM's activities in the weeks since leaving Chapter 11, part of what CEO Fritz Henderson called "our commitment to remain transparent and to keep the public informed of our progress." But attention was focused on a paragraph in the document that says the U.S. and Canadian governments will use "their reasonable best efforts" to launch an IPO by the anniversary date.
The automaker and its government benefactors have said repeatedly that they hope to do an offering in 2010, with company chairman
Ed Whitacre and White House auto task force head
Ron Bloom both saying as much since the beginning of August. But no one has been as specific as to predict a July filing, with most wagering GM will allow time for the economy to more fully recover and go public toward the end of the year.
Caveats abound. The filing notes that an IPO, like most offerings, would be subject to current market conditions. And the verbiage that has attracted so much attention seems to simply echo a statement the company made in
another 8k filed back in July that seemingly is out of date compared to the more recent (and vague) declarations of both Whitacre and Bloom.
But perhaps such a glaring spotlight and attention to detail is only to be expected for GM, which was a political piñata for much of the first half of the year and is now 60% owned by the U.S. government. Safe to wager that whenever that IPO comes, it won't be soon enough for the folks manning the phone lines inside General Motors. -
Lou Whiteman
Lou Whiteman is a senior writer covering the automotive, transportation and industrial sectors. Follow him on Twitter @louwhiteman
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Politically, the idea of an IPO next year is a non-starter. Right now, the govt. has unrealizes losses on its investment in GM. Imagine going to the election next year with Billions of dollars in realized losses, if the govt. were to sell its stake. In fact, it would be an interesting exercise for an analyst at TheDeal to run several valuation scenarios for a Jun10 GM IPO, with varying losses for the govt.