GM is preparing to file the necessary paperwork for its IPO, in an attempt to raise about $16-20B. And after announcing its best quarter since 2004, CEO Ed Whitacre decided to pull a Costanza and leave on a high note, announcing that he will step down as CEO as of Sept 1.
The Federal Gub’ment is also expected to unload some of it’s stake in the troubled auto company when the public offering is made, to reduce its interest to a sub-50% level.
GM turned a profit in the first quarter and Chief Executive Officer Ed Whitacre said next week’s second quarter results will be “impressive”. But investors will have to believe that a company that lost $88 billion from 2005 through the first quarter of 2009 and wiped out equity investors when it declared bankruptcy last spring is worthy of another bet.
“With the government’s involvement and the extremely unusual bankruptcy that it went through, there are a number of stakeholders who have very conflicting interests,” said Linda Killian, a portfolio manager at Connecticut-based Renaissance Capital.
“They need to be very clear about what the plans are for the company and who is going to be making the decisions,” Killian said.
Jim Cramer made some comments about how the Prez should step up with a plan to repay the taxpayers for saving GM by allowing them to participate in the appreciation he sees coming from the IPO; and he seems to have followers. A CNBC poll showed 68% of respondents calling for an “Open IPO,” as opposed to the traditional procedure, wherein Erin Burnett points out that 80% of the stock is scooped up by institutions.
“This is a major opportunity for the president,” Cramer said. “I sure hope he doesn’t blow it.”
-CNBC via SeekingAlpha
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