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Analyst: GM will launch stock sale Nov. 18

September 2, 2010

Analyst: GM will launch stock sale Nov. 18

The Detroit News

General Motors Co. plans to announce its sale price for its highly anticipated initial public stock offering Nov. 17 and start trading shares Nov. 18, according to a Tampa-based research firm.

The Detroit-based automaker will begin its so-called "road show," with top GM executives selling the virtues of the company’s stock to potential investors, starting Nov. 3 — the day after the midterm elections, said Scott Sweet, senior managing partner for IPO Boutique in Tampa.

Sweet said multiple sources told him about GM’s IPO plans; he declined to identify them.

It’s unclear if the dates have been finalized, and the Securities and Exchange Commission must approve GM’s registration statement before the company can offer its stock for sale.

GM is in a "quiet period" before an IPO, so no one is authorized to discuss the process publicly.

However, a person briefed on the matter confirmed the Detroit automaker’s plan to launch a worldwide roadshow after the elections and then hold a sale a few weeks afterward.

GM will court investors in Asia, Europe and around the United States in its extensive roadshow led by Daniel Akerson, who took over as GM’s CEO Wednesday.

A post-election road show and sale means GM is likely to announce third quarter earnings before the initial public stock offering. If the third quarter earnings are good, it could push the stock price upward.

The Treasury Department hasn’t decided how much of its 61 percent stake in GM it will sell. The government got the equity stake in exchange for about $43 billion in government bailout loans.

Numerous published reports have suggested that the government could sell between $10 billion and $16 billion, but government officials could opt to sell less than that as market conditions dictate.

GM is also likely to sell preferred stock of $2 billion to $3 billion, based on how much common stock is sold. Generally, companies sell preferred stock at a ration of 1:5 to common stock.

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