Make us your home page
Instagram

GM returns to $33 IPO price on optimism after 2-year slump

Hilario Reyes details a Chevrolet Silverado at the Chicago Auto Show in February. GM plans to introduce about 20 new vehicles in the United States this year, including the profitable Silverado. 

Getty Images

Hilario Reyes details a Chevrolet Silverado at the Chicago Auto Show in February. GM plans to introduce about 20 new vehicles in the United States this year, including the profitable Silverado. 

SOUTHFIELD, Mich. — General Motors, poised to rejoin the Standard & Poor's 500 Index, topped its $33 initial public offering price for the first time in more than two years Friday as the automaker prepares to introduce redesigned full-sized pickups.

GM rose 3.2 percent to $33.42 at the close in New York after touching $33.77. The shares peaked at $38.98 at the close on Jan. 7, 2011, less than two months after its November 2010 IPO. They slid below the IPO price in March 2011 and reached a low closing price of $18.80 in July 2012.

Confidence in Detroit-based GM is growing as the U.S. Treasury sells down its stake, helping facilitate a return to the S&P 500. The automaker also plans to introduce about 20 new vehicles in the United States this year, including its profitable Chevrolet Silverado and GMC Sierra pickups, as it seeks to rebound from an 88-year-low market share in 2012.

"The turnaround story that they've been outlining, it's really starting to come together," David Whiston, an equity analyst with Morningstar in Chicago, said Friday. "Especially next year, I think, is going to be fantastic for them" as sales of the new trucks take hold.

GM's share price may also be a milestone in the political debate about whether the United States should have provided a $49.5 billion bailout in 2009. Critics dubbed GM "Government Motors." Republican 2012 challenger Mitt Romney attacked President Barack Obama on the issue.

The automaker has said it expects modest improvement this year compared with 2012, when it earned $6.19 billion, its third profitable year since emerging from its 2009 U.S.-backed bankruptcy reorganization.

Shares began to slowly rebound in August as GM held talks with labor unions about cutting work hours at its main factory in Germany to lower production. The company later in the year also discussed its new product lineup for 2013, including Silverado, GM's top-selling vehicle in the United States. Full-sized pickups are the main source of profit for GM as well as U.S.-based competitors Ford and Chrysler.

GM shares in December reached their highest price in 10 months after GM announced it would spend $5.5 billion to buy 200 million shares back from the Treasury, and the government said it would sell the rest of the holding within 15 months. As of April 1, the Treasury held 241.7 million shares, representing a 16.4 percent stake, according to GM's proxy statement.

GM joined Ford and Chrysler in gaining U.S. market share in the first quarter for the first time in 20 years, fueled by the most competitive lineup from top to bottom in a generation.

"There are some things that have improved" since July, said Christian Mayes, an analyst with Edward Jones. "You're seeing more interest from fund managers and that type of investor."

$33

General Motors' initial public offering stock price in November 2010, after its $49.5 billion bailout from the U.S. government in 2009

$38.98

GM's closing stock price on Jan. 7, 2011, its peak after the IPO

$18.80

GM's stock price in July 2012, representing a 52 percent drop from its peak

$33.42

GM's closing price Friday, the first time it has eclipsed the IPO price in more than two years

European auto sales increase a bit but are still dismal

European auto sales broke an 18-month losing streak in April, industry data showed Friday. New passenger car registrations in the 27-nation European Union rose 1.7 percent in April from a year earlier, the first increase since September 2011, the European Automobile Manufacturers' Association reported. However, the overall trend in car sales remained a dismal one: April sales were still the third-worst ever recorded for that month since the association began compiling the data in 1990.

GM returns to $33 IPO price on optimism after 2-year slump 05/17/13 [Last modified: Friday, May 17, 2013 10:33pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Bloomberg News.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. Related Group breaks ground on complex at old Tampa Tribune site

    Real Estate

    TAMPA — When Miami developer Jorge Perez first eyed a 4.2-acre tract on the west bank of the Hillsborough River two years ago, people asked him if he wouldn't prefer to build on the opposite side closer to the downtown core.

    No way.

    From left, Related Group executive associate Arturo Penaa, Jorge Perez, center, founder and CEO of the Related Group, Mayor Bob Buckhorn and Steve Patterson, the President of Related Development dig their shovels  during the groundbreaking ceremony of the 400 unit Riverwalk Manor apartment complex on site of the old Tampa Tribune building on Wednesday. [OCTAVIO JONES | Times]
  2. Eat 3-course meals for $35 at these 100 restaurants for Orlando's Magical Dining Month

    Food & Dining

    In the early 1900s, hotels offered "table d'hote" or "prix fixe" menus as a form of loss leader. Hotels didn't necessarily make money on these lower-priced, multi-course meals, often served at communal tables, but they made up for it on the booze. Prohibition may have contributed to a gradual shift toward a la carte …

    Bulla Gastrobar serves a variety of Spanish and Portuguese dishes.
  3. Lightning GM Steve Yzerman sells house for $3 million to new player

    Real Estate

    TAMPA — Tampa Bay Lightning General Manager Steve Yzerman's multi-million Davis Islands home is staying in the Lightning family. Yzerman sold his 6,265-square-foot house Monday to new defenseman Dan Girardi for $3 million.

    The Davis Islands home of Tampa Bay Lightning General Manager Steve Yzerman sold for $3 million Monday to Lightning defenseman Dan Girardi. | [Courtesy of Hi Res Media]
  4. Trigaux: As Florida seeks top 10 status as best business state, red flag rises on workforce

    Business

    In the eternal quest to appeal more to business than other states, Florida's managed to haul itself out of some pretty mediocre years. After scoring an impressive 8 among 50 states way back in 2007, Florida suffered horribly during and immediately after the recession. Its rank sank as low as No. 30 only four years ago, …

    Florida's trying to make strides in preparing its high school and college graduates for the rapidly changing skill sets of today's workforce. But the latest CNBC ranking of the best and worst states for business gave Florida poor marks for education, ranking No. 40 (tied with South Carolina for education) among the 50 states. Still, Florida ranked No. 12 overall in the best business states annual ranking. [Alan Berner/Seattle Times]
  5. For the first time in Florida, a white person is set to be executed for killing a black person.

    State Roundup

    GAINESVILLE — For the first time in state history, Florida is expecting to execute a white man Thursday for killing a black person — and it plans to do so with the help of a drug that has never been used before in any U.S. execution.

    This undated photo provided by the Florida Department of Corrections shows Mark Asay. If his final appeals are denied, Asay is to die by lethal injection after 6 p.m. Thursday. Asay was convicted by a jury of two racially motivated, premeditated murders in Jacksonville in 1987.  [Florida Department of Corrections via AP]