Something a little more important than the newest Chevy went on sale at GM today — new shares of the company hit the market at $35 this morning and appeared by lunchtime to be doing a healthy business. And while today’s IPO will likely put a sizable dent in the company’s debt, CEO Dan Akerson isn’t as eager as his predecessor to make promises that future stock sales will guarantee taxpayers are repaid in full.
Akerson said, “I don’t know where the market is going to be a year or two down the road, so I can’t make such a bold statement.”
There is some good news though, as the Treasury Dept. is selling around 75% of the common shares it owns as part of its deal with GM. The sale of these shares should earn back around $11.8 billion, leaving around $27 billion in GM’s outstanding bailout balance.
In order for the government’s remaining 33% share in GM to be repaid, the stock price would need to increase by around 65%, which Akerson says he’s hopeful will eventually happen.
“Sure, I’m hopeful, and I’m not saying it can’t happen. I just don’t know what the markets are gonna do,” he said. “I do think the company is well positioned… We’ve got a strong balance sheet and a good operating model so things look good for General Motors.”
GM’s previous CEO, Ed Whitacre had made some pretty promising statements last January when he told CNN, “I think the government’s investment is well placed and I think they’ll make a lot of money.”
Of course, Whitacre, who left in September is also the one who made a TV commercial saying the government loan had actually been paid back.
GM stock opens strong [CNN]