Whitacre speculates on GM’s upcoming IPO

October 14th, 2010 - 9:18 pm ICT by Pen Men At Work  

October 14, 2010 (Pen Men at Work): Last year, when the Obama Administration rescued GM with a $50 billion aid, the future seemed bleak for the U.S. automaker. GM has since turned the tables on all speculations of it not being able to pull through by announcing an IPO next month that is expected to reduce the Treasury Department’s 61 percent stake in GM and send the company well on its way to recovering its lost glory.

GM Chairman Ed Whitacre, 68, believes that this IPO is the right thing to get the company back on track and give investors a hope of breaking even in the near future. According to Whitacre, the price of the IPO should fall somewhere in the $20 to $25 range, though he says that it is still too early to tell for sure. Most reports corroborate Whitacre’s speculations but his comments mark the first publicly issued statements by GM on the issue.

Although U.S. Securities regulations prevent any detailed discussions regarding the developing deal, buzz is that the IPO will focus on a pitch to retail investors and while 20 percent is typical in this sort of deal, roughly 25 percent of GM’s shares are to be allocated to this particular group.

Whitacre was recently replaced as CEO by Dan Akerson when Whitacre stepped down from the post citing personal reasons, saying that once the IPO is out, he would have to commit to the company for at least the next few years, and that he was not in a position to do so.

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