NYT headline:

G.M. Spends $3.5 Billion for Lender to Subprime.

The purchase of Americredit is the last step GM needs before it can take itself public again. With that piece of the puzzle in place, “Government Motors” can now accelerate its bid to return to the NYSE.

Look for GM to file its SEC registration statement as soon as next month. Their IPO should raise $10-20 billion dollars.

If the filing takes place later this summer — before Labor Day — then the initial public offering itself will occur in the Fall. I would expect that GM will be public prior to the 2010 November Congressional elections.

No word on who the underwriters will be — but post SEC settlement, it would be surprising if Goldman Sachs was not prominently on the book, along with fellow bail-outtees Morgan, BA/MER and Citi. If had to guess, it would be that the lead banker will be JPMorgan, led by wonder-boy/WH fave Jamie Dimon.

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UPDATE: July 23, 2010 9:25am

Time magazine says “GM IPO? Don’t Hold Your Breath,” but Reuters claims the IPO registration statement will be filed after Q2 earnings are reported . . .
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Previously:
When Does GM Get Kicked Out of the DJIA? (November 7th, 2007)

When Does GM Get Kicked Out of the Dow, part II (June 26th, 2008)

GM: Out of the Dow (May 7th, 2009)

Top 10 Things the Letters “GM” Stands For (April 2nd, 2009)

Category: Bailouts, Corporate Management

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

22 Responses to “GM IPO Coming in October”

  1. destor23 says:

    If the IPO is only $20 billion doesn’t the government end up taking a bath? Or will the government not liquidate its entire stake in the IPO?

  2. KidDynamite says:

    destor23: the IPO is not for the whole company – it’s just a small %.

  3. Mike in Nola says:

    I think they’re waiting too long. Do it while the idiots are still still buying. No time better than during euphoria induced by EU stress test theater.

  4. Petey Wheatstraw says:

    The corporatocracy sucks another gallon of blood from the host.

  5. Patrick Neid says:

    Another great shorting opportunity coming soon.

  6. Chief Tomahawk says:

    Whatever happened to GM’s pension obligations? Were those deposited to the Taxpayer’s balance sheet, or will they still be an overhang to the new GM’s balance sheet?

    ~~~

    BR: If memory serves, most were converted into equity . . .

  7. Mannwich says:

    The subprime economy rolls onward.

  8. past this: http://search.yippy.com/search?input-form=clusty-simple&v%3Asources=webplus&v%3Aproject=clusty&query=GM+buys+subprime+auto+lender
    ~~
    the idea of an IPO, for GM, is an insult.

    so many decry the ‘state of education’..those Shares should be given, pro rata, to each, and every, under 18..then, maybe, We’d find, again, that ‘Markets’ do, actually, Work.

    given the Incentive, those young’uns might, you know “For a Change”, bother to learn how Businesses operate, and the Operators that find their way into Businesses.

    it might be the least We could do, after all, the funding, to “Save GM”, came from their hides, anyways..

  9. constantnormal says:

    “The purchase of Americredit is the last step GM needs before it can take itself public again.”

    A subprime lender? WTF? WHAT business NEEDS a subprime lender?

    And what is wrong with GM using small banks and alternative lenders for customer financing? Is it really the case that they need to be able to offer zero percent lending to attract customers? If so, what does this say about that industry?

  10. rktbrkr says:

    The merry go round never stops, Son of Ditech. So the US endorses, actually funds the purchase of a subprime lender by GMAC. This is kind of sickening but at least US is not interfering in company management.

    Hmmm, maybe AIG can snap us some subprime lenders too

  11. b_thunder says:

    Just like subsidizing houses for deadbeats, the Gov’t will end up paying the People’s Money to more deadbeats. They must think the pockets of the middle class are bottomless.

    BTW, s anyone here seriously considering investing int he new “subprime” automaker GM? Even before the change of control of the Congress?

  12. GM is a GSE now, operating in a hazo-sphere somewhere between a public corporation answerable to stockholders, and a government jobs-saving agency answerable to politicians. Who was that guy said a man can not serve two masters?

    GM buying a subprime lender, as a requirement to allowing some of the public into the sweet deal it has at the public trough? Very strange. Really, you can’t make this stuff up.

    I know I need to get in on that GM IPO ground-floor. I mean look at how well its IPO from way back when did–the shares started life just above zero, and about a hundred years later, that’s where they ended.

  13. rktbrkr says:

    We’re living in a subprime world. Thanks to the bad economic conditions the banks are cutting the credit scores on a wide scale so they can advertise low teaser rate of 3.99% then tell the prospective borrower it’s 7.99% because they were BAD. And the big banks are getting the money for free – The United States of Immortal Banks.

  14. Mannwich says:

    @constant: It’s not just an indictment on the industry but one on our economy whereby far too many people obviously cannot even afford the very cars that we make without burying themselves in debt.

  15. J Kraus says:

    Seems like the New GM is not that different than the Old GM.

    They are obviously gearing up to resume selling products to people who cannot afford them. Bad in the long run for brand image, resale value (as nearly-new repossessed cars are sold cheaply in the resale market) and the economy.

    Next up: Generous rebates and cash-back financing.

  16. constantnormal says:

    @Mannwich

    Exactly. And the problem that GM ought to be trying to solve is how to sell its products without having to resort to nothing-down, zero-percent financing. If they cannot do that, they have no business being in business.

    One approach might be abandoning “selling” cars altogether, and instead moving to a lease-only operation. It might sound crazy, but I suspect that a lotta folks might find the notion of a debt-free new car appealing. In such a case, they don’t need a subprime lending operation, which can only lead to trouble.

    I can envision an entire line of advertising extolling the virtues of “no-debt new cars”.

  17. constantnormal says:

    Don’t the goobermint’s “old” GM shares (and thus its ownership position in GM, the “basis”, if you will) represent about a $42B “purchase”? And they’re going to do an IPO for about half that? Are they only going to IPO half the new shares?

    Surely my beloved goobermint would not manage to turn a 50% loss on a position held for only a year.

    Say it ain’t so, somebody …

  18. constantnormal says:

    Oops — I missed seeing KD’s response to destor23′s question.

    So how big a percentage is a “small %”?

    I knew that Timmy wouldn’t let me down. Now as GM cranks up its subprime lending machine, and manufactures phony assets by counting the defaulted loans as if they were good, they’ll be able to make ginormous profits for the Treachery Dept, so that we can balance the budget and pay down our debt overhang, and we will all live happily ever after!

    Every time a GM car sells, a bell rings in the Treachery Dept, until Timmy finally gets his wings.

  19. constantnormal says:

    I’m thinking about who would be dumb enough to pay ~$20B for a small percentage of the new GM. And the thought occurs to me, how about the Social Security trust fund? A bit of equities to juice up the returns, wot?

  20. BDW says:

    GM no longer owns a majority in GMAC to any unique level and GMAC is doing its utmost to destroy its dealer business. GM needs to create an finance arm so the dealers can stop dealing with the financial morons at “Ally” and do direct loans for purchase, much like GMAC once did before becoming an equity firm’s wet dream and our nightmare.

  21. willid3 says:

    constantnormal Says:
    July 23rd, 2010 at 10:43 am

    “The purchase of Americredit is the last step GM needs before it can take itself public again.”

    A subprime lender? WTF? WHAT business NEEDS a subprime lender?

    And what is wrong with GM using small banks and alternative lenders for customer financing? Is it really the case that they need to be able to offer zero percent lending to attract customers? If so, what does this say about that industry?

    the main reason GM wants a lender, is because every other major car company has one (its like competing one arm behind your back with every one else). in fact not having one is really a drag on sales. and it really costs more money to not have one, GMAC’s problem was diversifying into mortgages. like every other lender that was losing proposition of late.
    car loans were never the problem, and leasing became one when nobody could realistically come close to what future values were. until lately when used vehicles values took and went through the roof. now leasing actually works out good, if you can deal with the different state laws on it.
    its also costs GM more now days to actually do any finance incentives, because thats real money, as opposed to accounting transfers. had the same discussion when I was at a captive for another company. they didn’t want to change that because its a real cost.
    and GM wants to get back into finance (for which they were one of the leaders of) because it makes money, and isn’t really hard to do.
    and it helps sell the product.
    while they seem to be making noises that GMAC will continue to service the dealers, I am thinking they will phase that out, as they don’t seem pleased with how that is working. their real customer is the dealer, and if the dealer has trouble getting floor planning done ,that will impact GM sales directly.

    and for most of the years that GMAC was part of GM, it was a big money maker. same as all of the other captives

  22. ToNYC says:

    Long lines and high prices for other than GM cars is in our future. People’s cash gets crowded out of the saving-investment-reward business with the Banks now bald-facing creating Government-Bank credit. The Banks will naturally pick up the pieces cheap as Jamie did with their free cash from the enabler Tim and Uncle Ben. The old Soviet Planned Economy lines where you get the stuff THEY planned to make.