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The Water Cooler
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.General Motors sends Mr. Goodwrench to sidelines
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<blockquote data-quote="TerryMiller" data-source="post: 1356814" data-attributes="member: 7900"><p><span style="font-family: 'Georgia'"><span style="font-size: 12px">And this story, dated in August:</span></span></p><p><span style="font-family: 'Georgia'"><span style="font-size: 12px"></span></span></p><p><span style="font-family: 'Georgia'"><span style="font-size: 12px"><a href="http://www.theepochtimes.com/n2/content/view/41268/" target="_blank">http://www.theepochtimes.com/n2/content/view/41268/</a></span></span></p><p><span style="font-family: 'Georgia'"><span style="font-size: 12px"></span></span></p><p><span style="font-family: 'Georgia'"><span style="font-size: 12px"><strong>GM Far From Repaying Government Debt, Despite IPO Intentions</strong></span></span></p><p><span style="font-family: 'Georgia'"><span style="font-size: 12px"></span></span></p><p><span style="font-family: 'Georgia'"><span style="font-size: 12px">News Analysis</span></span></p><p><span style="font-family: 'Georgia'"><span style="font-size: 12px">By Frank Yu</span></span></p><p><span style="font-family: 'Georgia'"><span style="font-size: 12px">Epoch Times Staff </span></span></p><p><span style="font-family: 'Georgia'"><span style="font-size: 12px"></span></span></p><p><span style="font-family: 'Georgia'"><span style="font-size: 12px">Aug 19, 2010</span></span></p><p><span style="font-family: 'Georgia'"><span style="font-size: 12px"></span></span></p><p><span style="font-family: 'Georgia'"><span style="font-size: 12px">NEW YORKAutomaker General Motors Co. this week filed a form S-1, laying the groundwork for issuing public stock at a later date.</span></span></p><p><span style="font-family: 'Georgia'"><span style="font-size: 12px"></span></span></p><p><span style="font-family: 'Georgia'"><span style="font-size: 12px">Psychologically, the filing is an important step for the company, as merely a year ago, it filed a government-assisted bankruptcy to stave off insolvency. Today, it may be ready to shed its government support and move on as a public company.</span></span></p><p><span style="font-family: 'Georgia'"><span style="font-size: 12px"></span></span></p><p><span style="font-family: 'Georgia'"><span style="font-size: 12px">The 550-page document laid out GMs reasons for filing an initial public offering (IPO) of stock, but was short on details. </span></span></p><p><span style="font-family: 'Georgia'"><span style="font-size: 12px"></span></span></p><p><span style="font-family: 'Georgia'"><span style="font-size: 12px">GMs announcement to sell stock ultimately changes little for the company, until further details are sorted out. The filing states little on when it would occuralthough most analyst predict October or November for a firm stock saleor set a price for its shares. It also did not mention how much of the money would go toward repaying U.S. taxpayers, which own roughly 61 percent of the company. </span></span></p><p><span style="font-family: 'Georgia'"><span style="font-size: 12px"></span></span></p><p><span style="font-family: 'Georgia'"><span style="font-size: 12px">But the S-1 also disclosed certain risks GM or its investors may face. It stated that the company may not yet be prepared to act as a public company with public financial reporting capabilities, as it stated that its internal controls over reporting was not effective, and warned that the U.S. Treasury may continue to hold substantial interest in the company even after the share sale.</span></span></p><p><span style="font-family: 'Georgia'"><span style="font-size: 12px"></span></span></p><p><span style="font-family: 'Georgia'"><span style="font-size: 12px"><strong>The filing stated that it wants to sell 500 million shares. Assuming that it returns all of its taxpayer obligations under the IPO, roughly 305 million shares would have to be sold on behalf of the U.S. Treasury, which is owed $43.3 billion. GMs shares would have to be worth $142 for it to repay the U.S. government in fullan impossible proposition as currently constructed.</strong></span></span></p><p><span style="font-family: 'Georgia'"><span style="font-size: 12px"></span></span></p><p><span style="font-family: 'Georgia'"><span style="font-size: 12px">Essentially, taxpayers should not get their hopes up that GM would repay its government obligations via an IPO right awayit may take some time, and may very well mirror American International Group Inc.s slow but steady process to repay its government support. </span></span></p></blockquote><p></p>
[QUOTE="TerryMiller, post: 1356814, member: 7900"] [FONT="Georgia"][SIZE="3"]And this story, dated in August: [url]http://www.theepochtimes.com/n2/content/view/41268/[/url] [B]GM Far From Repaying Government Debt, Despite IPO Intentions[/B] News Analysis By Frank Yu Epoch Times Staff Aug 19, 2010 NEW YORKAutomaker General Motors Co. this week filed a form S-1, laying the groundwork for issuing public stock at a later date. Psychologically, the filing is an important step for the company, as merely a year ago, it filed a government-assisted bankruptcy to stave off insolvency. Today, it may be ready to shed its government support and move on as a public company. The 550-page document laid out GMs reasons for filing an initial public offering (IPO) of stock, but was short on details. GMs announcement to sell stock ultimately changes little for the company, until further details are sorted out. The filing states little on when it would occuralthough most analyst predict October or November for a firm stock saleor set a price for its shares. It also did not mention how much of the money would go toward repaying U.S. taxpayers, which own roughly 61 percent of the company. But the S-1 also disclosed certain risks GM or its investors may face. It stated that the company may not yet be prepared to act as a public company with public financial reporting capabilities, as it stated that its internal controls over reporting was not effective, and warned that the U.S. Treasury may continue to hold substantial interest in the company even after the share sale. [B]The filing stated that it wants to sell 500 million shares. Assuming that it returns all of its taxpayer obligations under the IPO, roughly 305 million shares would have to be sold on behalf of the U.S. Treasury, which is owed $43.3 billion. GMs shares would have to be worth $142 for it to repay the U.S. government in fullan impossible proposition as currently constructed.[/B] Essentially, taxpayers should not get their hopes up that GM would repay its government obligations via an IPO right awayit may take some time, and may very well mirror American International Group Inc.s slow but steady process to repay its government support. [/SIZE][/FONT] [/QUOTE]
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