The initial public offering of General Motors (GM) became the biggest worldwide, at 23.1 billion dollars, after investors promptly bought more shares after the IPO last week, showing strong demand for the bailed out automaker’s shares.
With the additional shares purchased, GM managed to top the July IPO of the Agricultural Bank of China, worth some 22.1 billion dollars.
Underwriters such as Bank of America Merrill Lynch, JPMorgan Chase & Co, Morgan Stanley and Citigroup exercised their options to buy additional shares and purchased 2.37 billion dollars worth of common shares (71.7 million). They also purchased, for 650 million dollars, some 13 million preferred shares.
GM’s IPO last week rose to 20.1 billion dollars, making it the highest IPO in the US ever. Company shares went up by 3.6 percent in the first day of trading and in the second day they posted a 2.5 percent increase from the initial IPO price of 33 dollars per share.
The century-old American automaker filed for bankruptcy in 2009 and it was saved by a bailout of 50 billion dollars from taxpayers’ money. Among rising concern that the IPO might not recover all of the taxpayers’ investment, the White House reassured the public that the company is now well on its way to settle the debt by the end of 2012 at the latest.
Despite the IPO, the majority package is still owned by the US Treasury, and approximately one third of the stock is outstanding.
GM sold about 478 million common shares for 15.77 billion dollars and some 4.35 billion dollars worth of preferred shares, 350 million dollars above the initial target of 4 billion.
The automaker was advised for the IPO by Evercore Partners, while the US Treasury had Boston Consulting Group and Lazard as their advisers.
