GM IPO the largest in history


The revamped General Motors issued its IPO on Wednesday and raised $20.1 billion. The actual amount will be closer to $23.1 billion after counting investors on a waiting list called an overallotment. This is already the largest IPO in U.S. history and if the overallotment purchases come through as estimated, then this will be the largest IPO in world history. The size of this IPO (Initial Public Offering) means that investors are very confident in GM which is a completely different story from not too long ago.

It seems like only yesterday that the governments of the U.S. and Canada had to bail out GM and at the time the carmaker suffered from a terrible reputation for building low quality vehicles. After the bail out many people were upset with them because they did not want taxpayer money to go to the failing company. However, since that time (actually even before then, but reputations trail reality) GM started to produce some very good and competitive vehicles. They were also able to cut costs and that combination of a strong product line up and lower costs makes for a good business case.

It is great to see GM have a strong IPO and enjoy such confidence and optimism with investors. It is equally nice to see the government own less of the company now that they have gone public. Although they remain the largest shareholder, this will eventually change and for everyone, including GM that time will hopefully be sooner rather than later. It is also important that GM goes not relax now that they have garnered respect from investors once again. This complacency is one of the major reasons they fell to begin with. Hopefully they have learned from past mistakes and will keep pumping out good cars and continue to innovate and improve.