GM's IPO was "successful beyond expectations," said CEO Dan Akerson.
General Motors considers the initial public offering of its new stock a great success after raising an all-time record $23.7 billion for its principal shareholders and the company itself, said CEO Dan Akerson during his first public appearance since the IPO was completed.
However, GM’s board of directors won’t have a voice in the timing of the sale of the next block of GM stock Akerson cautioned.
“The IPO was successful beyond expectations. We’re very proud of that,” Akerson said. “I don’t know when the next road show will be,” Akerson said after the ceremony marking the “official” start of production for the Chevrolet Volt, at the company’s Detroit-Hamtramck assembly plant.
(For more on the Volt roll-out and GM’s plans to add 1,000 jobs at its battery vehicle program, Click Here.)
“The board is responsible for the management of the business. The government has stayed out of the management of the business,” Akerson said. “That’s the preserve of the board,” he said. But GM’s principal shareholders, notably including the U.S. Treasury Department, will determine whether additional GM share are put up for sale.
“They’re like any other shareholder. They are going to determine the next step,” Akerson said.
As a result of the IPO, the government’s stake was originally expected to decline from 60.1% to 40%, but as it became clear that there was unexpectedly strong demand for GM’s new shares, the government put more stock on the block. And its stake declined even further when the IPO’s underwriters exercised an over-allotment clause allowing them to sell even more shares.
That move generated another $2.37 billion, but reduced the Treasury’s stake to less than 33%.
In all, with the completion of the over-allotment, the GM IPO generated $23.1 billion through the sale of both common and convertible preferred shares. That well exceeds the previous IPO record of $19.5 billion set by Visa in 2008.
The U.S. Treasury wasn’t the only stakeholder to benefit from the IPO. Other principal shareholders include the Canadian and Ontario governments, the Voluntary Employee Benefit Association created by GM and the United Auto Workers Union, and former bondholders who had agreed to accept equity following GM’s 2009 bankruptcy.
Despite the higher-than-anticipated demand, and a last-minute bump in the IPO strike price, to $33 a share, the government still believes it will lose billions of dollars on the GM IPO unless subsequent sales of Treasury shares can be priced in the mid-$50 range. GM stock finished trading, on Tuesday, by rising above the $34 mark despite the day’s overall downturn on the New York Stock Exchange.
Separately, Akerson announced plans to add 1,000 new jobs for GM’s battery car development program and said the maker is looking for ways to ramp up production for the 2011 Chevrolet Volt. The first production version of the battery car, he added, will go to GM’s in-house museum, the GM Heritage Center in Sterling Heights, Michigan.