NEW YORK (AP) — General Motors stock began trading on Wall Street again Thursday, signaling the rebirth of an American corporate icon that collapsed into bankruptcy and was rescued with a $50 billion infusion from taxpayers.
The stock rose sharply in its first minutes of buying and selling, going for nearly $36 per share — almost $3 more than the price GM set for the initial public offering. The stock pulled back only slightly later in the morning. It had traded for less than a dollar when the company filed for bankruptcy last year.
On the floor of the New York Stock Exchange, a crowd eight deep jostled around the company’s trading post, adorned with its familiar blue-square logo with an underlined “GM.” CEO Dan Akerson rang the opening bell as raucous cheers went up and the sound of a Chevrolet Camaro’s revving engine echoed through the room.
The government hopes that the stock offering will be the first step toward ultimately breaking even on the bailout. For that to happen, the government needs to sell its remaining GM holdings for an average of roughly $50 a share over the next several years.
Ron Bloom, the Obama administration’s senior adviser for the auto industry, refused to predict whether taxpayers would get all the money back.
“We’re obviously eager to get the rest of it back as much as we can,” he said Thursday.
The GM IPO could wind up as the largest in history. GM raised the initial price to $33 and increased the number of shares it was offering because investor demand was so high. Counting preferred stock issued by the company, the deal’s value could top $23 billion.
“Almost $20 billion in private capital voted that they wanted to be part of General Motors. So we do think this is a good day,” he said.
In the initial offering, the government reduced its ownership stake from 61 percent to about 36 percent. The federal treasury unloaded 358 million shares of the resurrected GM — which is smaller, but cleansed of most of its debt. The company is profitable. If bankers exercise options to buy and resell more shares, the government will wind up selling more than 400 million shares, reducing the stake to 33 percent of GM.
“There’s a lot of work to do, but today is the beginning of the new company,” said Mark Reuss, GM’s North American president.
The reduced government stake should help repair the company’s image, which had been tarnished by accepting the bailout money, Mr. Akerson told reporters.
“They have taken their ownership down by roughly half,” he said. “I would say that the average taxpayer in the United States would look at this particular transaction as very positive.”
The stock offering is the latest in a series of head-spinning developments over the past two years for the American corporate icon.
In September 2008, to mark its 100th birthday, the automaker celebrated in the grand three-story atrium on the ground floor of its Detroit headquarters.