Instant view: GM IPO prices at top of range

NEW YORK (BestGrowthStock) – General Motors Co (GM.N: ) landmark initial public offering priced at $33 a share, the high end of a price range for the deal that had previously been increased, as investors clamored for stock in the iconic automaker.

GM, which had been forced to file for bankruptcy and seek a taxpayer bailout last year, sold 478 million common shares in the IPO, raising about $15.8 billion, a source told Reuters.

The following is reaction from industry analysts and investors:

DAVID WHISTON, ANALYST, MORNINGSTAR, CHICAGO

Values the stock at $44 and says the credit markets are “basically valuing the stock in the high $30s.

“So I am not surprised to see the IPO oversubscribed as there was clearly more demand than GM was expecting.

“I think it shows that investors think that the worst is over and I agree.

“Last year industry sales were 10.4 million and this year we’re going to be up about 1 million from that. I expect that number to keep going up.”

TIMOTHY M. MANGANELLO, CHAIRMAN AND CEO OF BORGWARNER INC, AUBURN HILLS, MICHIGAN, AN AUTO PARTS SUPPLIER

“It’s good to have GM back as a publicly-traded company. It’s good that the general public recognizes GM as what will be hopefully a healthy company for the future. The fact that they’re oversubscribed and the fact that they increased their transaction price for the initial public offering means that people have confidence in the future of GM. The fact that they have very little debt, good cars coming out, good product coming out, I think it’s a positive for the industry.”

“It creates a real positive halo for Chrysler. I think that Chrysler obviously doesn’t feel they’re quite ready for prime time yet…All this will create a more positive momentum for Chrysler.”

ADRIAN CRONJE, CHIEF INVESTMENT OFFICER AT BALENTINE LLC, AN ATLANTA-BASED WEALTH MANAGEMENT FIRM

“This is by all accounts, going to be a very successful IPO. What was that statement that used to float around? What’s good for GM is good for America. Well, I think in this case, what’s good for GM is good for the American taxpayer.

There’s still some ways to go before the company can repay all of the initial taxpayer outlay, but I think the interest in this IPO is a positive sign nonetheless.”

DAVE COLE, CHAIRMAN CENTER FOR AUTOMOTIVE RESEARCH, ANN ARBOR, MICHIGAN

“The ratio of requests compared to the number of shares available was very high and the pricing moved up considerably from what was originally expected. This indicates a pretty strong demand for GM shares.

“GM is making a lot of money at depression levels of sales. As the market improves it should make even more money.

“The success of the GM IPO also tells us that the restructuring of the auto industry has made automakers and suppliers amazingly profitable at depression levels.”

PRABHAKAR PATIL, CHIEF EXECUTIVE OF COMPACT POWER, THE NORTH AMERICAN UNIT OF LG CHEM, A SUPPLIER OF THE BATTERY FOR THE CHEVY VOLT IN, TROY, MICHIGAN

“For a change it’s a good to see things go in a positive direction. With GM in particular, I really have to give them a lot of credit because I really lived through that whole transition with them.”

“It was heartening to see that they maintained their focus and the determination to have the Volt launch on time…It’s a positive for GM’s determination and that is being recognized with that kind of reaction.”

XAVIER MOSQUET, SENIOR PARTNER AND MANAGING DIRECTOR THE BOSTON CONSULTING GROUP, IN TROY, MICHIGAN

“So far, the new leadership team is doing very good work. Market shares are up, prices per unit are up. Quarterly results have been improving quarter after quarter. Basically GM is doing what it said it would do.”

“There is no IPO that is insensitive to the overall macro condition and, in this environment, what the automotive market will do. What we’re seeing right now, the automotive markets are not yet at their best, far from that, but they’re certainly recovering from last year.”

HEDGE FUND MANAGER DOUG KASS OF SEABREEZE PARTNERS, PALM BEACH, FLORIDA

“Investors should buy what the government sells. In the 1970s, an investment in Chrysler the day of the government loan guarantee would yield a quadruple in Chrysler’s shares in under three years. Ten years later an investment in the government’s Conrail IPO would have yielded a triple in return over five years and an eight bagger in a decade. This year’s partial block sale of Citigroup would have already yielded a 30 percent return. As to the specifics of GM it is attractive on a financial, operational, market position (in emerging markets) and valuation basis. In the fullness of time I expect the shares to have a “5” handle to them if the US economy can sustain its growth.”

(Reporting by Deepa Seetharaman, Jennifer Ablan, Nick Carey and Deepa Seetharaman)

Instant view: GM IPO prices at top of range