GM returns to IPO levels

May 18, 2013 at 9:08 AM   |   0 comments

| License Photo
DETROIT, May 18 (UPI) -- Shares of U.S. automaker General Motors Co. closed above their original purchase price on Friday for the first time in more than a year.

Shares rose to $33.42, topping the $33 per share offer at GM's return to life as a public company in November 2010.

It has been since February 2011 that GM has closed ahead of its initial public offering or IPO price, The Wall Street Journal reported.

What is going right at GM? Shares are riding a broad based optimism in stocks and doing well due to strong sales in China and the introduction of two pickup trucks, the 2014 Chevrolet Silverado and GMC Sierra, the Journal said.

Pickup trucks on average earn the company $7,000 in profit per truck, the Journal said.

Investors are also encouraged by the U.S. Treasury Department's announcement that it would divest itself of GM stock by April 2014.

The government currently owns 241.7 million shares, 16.4 percent of the company, which is valued at about $8 billion. The shares are a hangover from GM's 2009 bankruptcy, which prompted a government bailout.

The government would have to wait until GM shares reached $79 per share in order to break even on the bailout.

Also in GM's favor is the possibility of its return to the Standard & Poor's stock index, which ended when it declared bankruptcy.

An S&P spokesman would not comment on when GM might be invited back into the fold.

A GM spokesman said the company was looking past the recent gains.

"Our sights are set further down the road than a single day's closing price," he said.

© 2013 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
Trending News
Join the conversation
x
Feedback