GM's return to trading seen as 'good day'

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NEW YORK --- 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.

Traders gather around the GM post at the New York Stock Exchange during the company's initial public offering. The government hopes it will help in breaking even from the $50 billion bailout.  Mark Lennihan/Associated Press
Mark Lennihan/Associated Press
Traders gather around the GM post at the New York Stock Exchange during the company's initial public offering. The government hopes it will help in breaking even from the $50 billion bailout.

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 slightly by early afternoon and closed at $34.19.

It had traded for less than a dollar when the old company filed for bankruptcy last year.

On the floor of the New York Stock Exchange, a crowd 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. Earlier this week, GM raised the high end of its initial price range from $29 to $33 and increased the number of shares it was offering from 365 million to 478 million common shares because investor demand was so high.

Counting preferred stock issued by the company, the deal's value could top $23 billion. At midday, 264 million GM shares had been traded, more than half the number sold in the IPO.

Such volume is not unusual following a high-profile offering. It's a sign that big institutional investors such as mutual and hedge funds are taking profits and smaller investors who were shut out of the IPO are now buying, said David Whiston, an auto equity analyst with Morningstar Inc.

"Often the way the world is, the Wall Street institutions get in at the lower price and the Main Street investor gets in at the higher price," he said.

The increased selling price, though, means the market is judging the GM rescue as a success, Bloom said.

"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.

Obama touts success of bailout

WASHINGTON --- President Obama on Thursday celebrated the return of General Motors to the U.S. stock market, saying it shows the "tough decisions that we made" during the financial crisis were beginning to pay off.

"American taxpayers are now positioned to recover more than my administration invested in GM, and that's a good thing," Obama said, speaking of his administration's $50 billion taxpayer-backed rescue of the venerable automaker.

With it's first day of trading, the once near-death automaker "took another big step toward becoming a success story," Obama said.

He said the revitalized GM proved that "doubters and naysayers" were wrong.

"We are finally beginning to see some of these tough decisions that we made in the midst of the crisis pay off," the president said.

House Republican leader John Boehner of Ohio, in line to become the House speaker in January, said he had favored allowing GM to go bankrupt.

-- Associated Press


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