DETROIT -
About two weeks after rolling out its initial public offering, General Motors has upped the estimated price range of the common stock and also bolstered the size of its preferred stock in the offering.
Specifically, the estimate price range for the 365 million shares of common stock that certain stockholders are selling is now $32 to $33 per share. It had been $26 to $29 per share.
Meanwhile, the Series B mandatory convertible junior preferred stock offering is now $4 million, compared to $3 million previously. Officials said 80 million shares of preferred stock are being offered, “excluding the amount that the underwriters have the option to purchase to cover over-allotments, if any. “
When it is time for pricing, the terms of both offerings will be finalized. Various reports are expecting this to take place Thursday.
Joint book-running managers are as follows: Morgan Stanley and J.P. Morgan (representatives of the underwriters); BofA Merrill Lynch; Citi; Goldman, Sachs & Co.; Barclays Capital; Credit Suisse; Deutsche Bank Securities and RBC Capital Markets.
Those interested in accessing a preliminary prospectus can do so at www.sec.gov for no charge.
Moreover, copies can be obtained 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 an email to prospectus@morganstanley.com.
—J.P. Morgan Securities LLC, Attention: Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717, telephone 1-866-803-9204
Officials noted that there has been a registration statement filed with the Securities and Exchange Commission. However, it has not gone under effect yet, officials said Tuesday.
“These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective,” officials emphasized.
KBB’s Bell: GM Not the Same Automaker as Before
Continuing on, James Bell, who is the executive market analyst for Kelley Blue Book’s Kbb.com, offered some commentary on the offering.
While acknowledging that purchasing stock in a company that had been through what GM experienced in the mid-to-late 2000s could be a bit scary to some, he stressed the comprehensive change that has occurred at the automaker.
“For many people, the idea of investing in a company that lost $82 billion between 2005 and 2008 and emerged from bankruptcy just 16 months ago may seem daunting, but it is fair and honest to note how the GM of today is not the GM of the past,” Bell suggested.
“The company’s new and/or redesigned products are resonating with consumers, as evidenced on Kelley Blue Book’s Kbb.com, where we see shopper interest in Chevrolet up 3 percent month-over-month (October 2010 compared to September 2010), and Cadillac up 2 percent in the same time period,” he continued.
Bell pointed to vehicles like the brand-new Lacrosse and Regal from Buick. He suggested such rides are pulling in shoppers whose attention Buick probably would not have otherwise caught. Bell also gave the example of the rapidly selling GMC Terrain.
“While it an overused cliché, it is the absolute truth that good product is the only sure cure for automotive industry ills,” Bell suggested.
“The U.S. Government’s managed bankruptcy process allowed GM to avoid liquidation and shake free from issues that were destined to choke-off chances for future success, such as unmanageable levels of debt and unbalanced supply vs. demand in production agreements with the unions,” he continued.
“The GM that will be available for investment this week is a very different company that will ultimately be powered by exciting and innovative products built in respect for market demand,” Bell concluded.