Make us your home page

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."


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


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


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


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

  1. Legalized medical marijuana signed into law by Rick Scott

    State Roundup

    TALLAHASSEE — Gov. Rick Scott on Friday signed into law a broader medical marijuana system for the state, following through on a promise he made earlier this month.

    Gov. Rick Scott signed legislation on Friday that legalizes medical marijuana in Florida.
  2. Line of moms welcome Once Upon A Child to Carrollwood


    CARROLLWOOD — Strollers of all shapes and sizes are lined up in front of the store, and inside, there are racks of children's clothing in every color of the rainbow.

    At Once Upon A Child, you often as many baby strollers outside as you find baby furniture and accessories. It recently opened this location in Carrollwood. Photo by Danielle Hauser
  3. Pastries N Chaat brings North India cuisine to North Tampa


    TAMPA — Pastries N Chaat, a new restaurant offering Indian street food, opened this week near the University of South Florida.

    The menu at Pastries N Chaat includes a large variety of Biriyani, an entree owners say is beloved by millions. Photo courtesy of Pastries N Chaat.
  4. 'Garbage juice' seen as threat to drinking water in Florida Panhandle county


    To Waste Management, the nation's largest handler of garbage, the liquid that winds up at the bottom of a landfill is called "leachate," and it can safely be disposed of in a well that's 4,200 feet deep.

    Three samples that were displayed by Jackson County NAACP President Ronstance Pittman at a public meeting on Waste Management's deep well injection proposal. The sample on the left is full of leachate from the Jackson County landfill, the stuff that would be injected into the well. The sample on the right shows leachate after it's been treated at a wastewater treatment plant. The one in the middle is tap water.
  5. Honda denies covering up dangers of Takata air bags


    With just a third of the defective Takata air bag inflators replaced nationwide, the corporate blame game of who will take responsibility — and pay — for the issue has shifted into another gear.

    Honda is denying covering up dangers of Takata air bags. | [Scott McIntyre, New York Times]