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GM IPO Becomes Largest in History

A carmaker of GM's magnitude wouldn't have had it any other way. The initial public offering recently made by the American manufacturer has become, by all intents and purposes, the largest in the history of the world, after the bank which backed the IPO decided to exercise over-allotment options.

The carmaker made the announcement on Friday, saying that “underwriters have exercised in full their over-allotment options” and purchased an additional 71.7 million shares of common stock and 13 million shares of mandatory convertible junior preferred stock .

The money paid by the underwriters amounts to $2.37 billion for the common stock and f $650 million for the preferred, bringing the total size of GM's IPO to a staggering $23.1 billion.

Thanks to the IPO, the percentage of GM still owned by the US government dropped to 33 percent. According to DetNews, roughly 90 percent of the shares were sold to American investors, with demand far exceeding the number of shares offered. GM sent on the market 478 million shares of common stock (total value of $15.77 billion, $33.00 per share) and 87 million shares of mandatory convertible junior preferred stock (total of $4.35 billion).

When the IPO was announced, its value had been evaluated by GM at $20.1 billion or $23.1 billion if the underwriters’ over-allotment options are fully exercised.

"Sixteen months ago, we were pretty much flat on our backs,"
GM's CEO said was the IPO was made, "but we picked ourselves back up and got back in the game. We need to work hard to repay that confidence and trust that has been placed in us."
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About the author: Daniel Patrascu
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Daniel loves writing (or so he claims), and he uses this skill to offer readers a "behind the scenes" look at the automotive industry. He also enjoys talking about space exploration and robots, because in his view the only way forward for humanity is away from this planet, in metal bodies.
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