GM IPO Is Filed And Warns Investors Of Risk
Posted in GM on August 18th, 2010 by scott – Be the first to commentGeneral Motors has filed for their IPO, expecting to raise somewhere in the neighborhood of 15 to 20 billion in one of the biggest IPOs ever.
The United States still owns a 61% stake in the company when they put 50 billion into the company last year.
Some of the comments by GM included the risk involved to investors, one that specifically stands out is:
The U.S. Treasury will continue to own a substantial interest in us following this offering, and its interests may differ..
In addition the WSJ has a couple of risks to point out as well that have to do with the new management and financial reporting.
With regards to the point of new management understanding the auto industry as mentioned on the WSJ, it’s really about the customers understanding the auto industry.
A good example, and I love this one from one of my favorite books “Made to Stick” is the Southwest Airlines example. The story is the CEO told the person conducting the interview that running Southwest was so easy, they could do it themselves if they understood one simple but primary core to their success.
“We are THE low cost airline” - He said if you understand that then you can run this company just as good as I.
Example: Flight Attendant asks if they could add salads to the menu because a lot of people have been asking for them.
CEO says, “would adding salads make us the LOW cost airline if we raise our prices to accomdate”,
Flight Attendant says, “no”
CEO says, “well then we won’t add them then will we?”.
Flight Attendant says, “um no I guess not”
The reason why I believe this is so important in the point about “understanding the auto industry” is because frankly “nobody really understands the auto industry” , hence the reason it’s in trouble.
There’s one thing that’s true today on the web, make it hard for someone to access or utilize your site, they’re gone. Make the checkout process a convoluted series of stupid steps, they’re gone. So how does successful companies who are killing it right now like Apple and such do it?
They’ve understood and solved a big problem which is overcomplicating things on the product side, ie. iPhone is very intuitive. But they’ve also made the experience side intuitive as well, and simple. It’s why their stores are always overflowing with people.
Bottom line is, make things dead simple both on the product side and the buying / experience side.
Press Release Below
DETROIT – General Motors Company today announced that it has filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission (SEC) for a proposed initial public offering consisting of common stock to be sold by certain of its stockholders and the issuance by the company of its Series B mandatory convertible junior preferred stock.
The amount of securities offered will be determined by market conditions and other factors at the time of the offering. The number of shares to be offered and the price range for the offering have not yet been determined.
Morgan Stanley and J.P. Morgan (representatives of the underwriters), BofA Merrill Lynch, Citi, Goldman, Sachs & Co., Barclays Capital, Credit Suisse, Deutsche Bank Securities, RBC Capital Markets, and UBS Investment Bank will be the joint book-running managers for the offering. When available, copies of the preliminary prospectus relating to the offering may be obtained for free, by visiting the SEC website athttp://www.sec.gov. Alternatively, you may obtain a copy of the preliminary prospectus, by contacting:
- Morgan Stanley & Co. Incorporated, Attention: Prospectus Department, 180 Varick Street, 2nd Floor, New York, New York 10014, telephone 1-866-718-1649, or by sending email toprospectus@morganstanley.com
- J.P. Morgan Securities Inc., Attention: Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717, telephone 1-866-803-9204
A registration statement relating to these securities has been filed with the SEC but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
Forward-Looking Statements:
In this press release and in related comments by our management, our use of the words “expect,” “anticipate,” “possible,” “potential,” “target,” “believe,” “commit,” “intend,” “continue,” “may,” “would,” “could,” “should,” “project,” “projected,” “positioned” or similar expressions is intended to identify forward-looking statements that represent our current judgment about possible future events. We believe these judgments are reasonable, but these statements are not guarantees of any events or financial results, and our actual results may differ materially due to a variety of important factors. Among other items, such factors might include: our ability to realize production efficiencies and to achieve reductions in costs as a result of our restructuring initiatives and labor modifications; our ability to maintain quality control over our vehicles and avoid material vehicle recalls; our ability to maintain adequate liquidity and financing sources and an appropriate level of debt, including as required to fund our planning significant investment in new technology; our ability to realize successful vehicle applications of new technology; and our ability to comply with the continuing requirements related to U.S. and other government support.
GM’s most recent annual report on Form 10-K and quarterly report on Form 10-Q provides information about these and other factors, which we may revise or supplement in future reports to the SEC.


