GM may raise IPO price driven by strong demand

• Source: Xinhua
• [16:21 November 16 2010]
• Comments

US auto giant General Motors Co. (GM) may raise its initial public offering (IPO) price to 32-33 US dollars driven by strong demand, an informed source said Monday.

In GM's file with the Securities and Exchange Commission (SEC), it set a preliminary IPO price ranging from 26 dollars to 29 dollars for 365 million shares of common stock.

The Detroit-based automaker is scheduled to price its IPO on Wednesday, and have its shares traded on the New York and Toronto Stock Exchanges the following day.

The source added that the underwriters are likely to exercise an overallotment option that could add another 54.8 million shares. GM also plans to expand the preferred stocks to 4 billion dollars from 3 billion dollars formerly.

GM's IPO is likely to be the second-largest in US history at the new price, only behind Visa Inc.'s 19.7 billion dollar IPO in March 2008.

GM reported a third-quarter profit of 2.16 billion dollars in the previous week, the third straight quarterly profit this year. The auto giant is well on its way to getting its first full-year profit since 2004 as well.

Badly shattered by the financial crisis, GM filed for Chapter 11 bankruptcy protection on June 1, 2009, and the US government pipelined 49.5 billion dollars to the company, in exchange for a 61 percent stake and 2.1 billion dollars of preferred stocks.