The governments of the United States of America and Canada paid quite a lot of money to support ailing automotive industry titan General Motors. The US’s bill alone was $50 billion dollars for the bailout, but the company has an idea to help pay back the taxpayer/investor: hold an IPO. That’s right, GM will be putting itself back on the market as the US government, UAW, and other creditors move to sell off their shares of the company on the open market.
However, just because the government is going to try to sell GM, that doesn’t meant that they’ll get their money back. An IPO is only as profitable as the value of the company, and in order for the government to make $50 billion dollars off their 304 million shares of Government Motors (60.8 percent of the company), investors would have to value the company twice the current value of Ford Motor Company, a GM competitor who is earning twice as much money per quarter as GM.
Right, that’ll happen. If GM’s new CEO, Dan Akerson, thinks that he can move this company until they start making money off his Chevrolets and robot astronauts, he’s fooling himself.
Tags: GM, General Motors, IPOs, GM announces IPO, initial public offering, Detroit, Michigan, automotive industry, Dan Akerson, US Government to sell off GM, bailouts, the stock market