Obama on GM IPO

[bga1]

http://www.cnbc.com/id/38579866?__source=yahoo%7Cheadline%7Cquote%7Ctext% 7C&par=yahoo

In the article he states that the tax payers are about to get their money back ($50 billion- with a B) when GM does an IPO this fall. Can someone explain this to me? I went to my online trading service and it says that GM has 600 million outstanding shares and that the shares are worth $.40 each. Forty cents per share x 600 million is 240 million. That's what is called GMs market cap- what all the combined shares are worth. So how in the world are we going to get 50 billion from an IPO. If GM flooded the market with shares - lets say a billion new shares - further diluting the company those shares would have to go for $50 per share wouldn't they?

Now to his credit the President is hazy on it. He first says that the tax payers would get their money this fall and then later he said "over time" the tax payers would get a "return" on investment.

Anyone have a clue what he is saying here or how this could possibly work?

[UpnorthGo4]

I don't know. But isn't it great for the residents of Michigan that Obama was able to save GM? Finally, we have a president with the guts to take the necessary action to protect an American owned manufacturer from closing their U.S. operations and going overseas, or from being purchased and swallowed up by a foreign competitor. I can't imagine why any real American wouldn't be thrilled by the rescue of an American business icon.

[whogoofed]

The value of the GM shares should reflect the underlying value of GM assets (how profitable it is basically). The shares when sold should sell for much more than .40cents a share (if GM has turned around to being profitable).

[diehard]

I don't know. But isn't it great for the residents of Michigan that Obama was able to save GM? Finally, we have a president with the guts to take the necessary action to protect an American owned manufacturer from closing their U.S. operations and going overseas, or from being purchased and swallowed up by a foreign competitor. I can't imagine why any real American wouldn't be thrilled by the rescue of an American business icon.

Amazing satire from the latest far right nut job! Proud of you, man.

[bga1]

The value of the GM shares should reflect the underlying value of GM assets (how profitable it is basically). The shares when sold should sell for much more than .40cents a share (if GM has turned around to being profitable).


Their last balance sheet shows that they are worth a negative 81 billion. Their last quarter of operations showed a loss of 6 billion. I get that GM could be profitable in years to come and that they can recover. However, if the market felt the IPO shares were going to sell at -lets say $10 per share (a price for which they would sell zero shares right now)- then the market price would be gravitating towards that number right now. But the fact is that the price has been falling. I think shares were a dollar a few months ago.

[Friend Of Tubby]

Their last balance sheet shows that they are worth a negative 81 billion. Their last quarter of operations showed a loss of 6 billion. I get that GM could be profitable in years to come and that they can recover. However, if the market felt the IPO shares were going to sell at -lets say $10 per share (a price for which they would sell zero shares right now)- then the market price would be gravitating towards that number right now. But the fact is that the price has been falling. I think shares were a dollar a few months ago.

Quite the save by Baracky Baby. Kind of like Matt Capps' save last night.