GM IPO
8:57 am
Mon October 18, 2010

Is the General Motors IPO losing steam?

 Next month’s General Motors’ big stock offering is expected to be much less than at one time predicted.

The GM Initial Public Offering is expected to hit the market around November 18th.

 When GM initially started talking about selling stock, the speculation was that November’s sale could be easily one of the largest initial public offerings in history.   Perhaps generating more than $16 billion.

Now some analysts are predicting the GM IPO will collect only about $6 billion. 

"That’s not entirely GM’s fault," says David Whiston,  an equity analyst with Morningstar Financial, "It certainly has some overhang issues like massive government ownership...and it’s also just a function of this not being the greatest macro-economic environment to have an IPO."

Whiston says another problem is investors want a quick return and the growth of GM’s stock will depend on how fast the US auto industry can return to pre-recession sales levels.  

The federal government has held a controlling interest in GM since the automaker passed thru the bankruptcy process.   The sale will lessen the government’s stake.