Would YOU invest in GM?! IPO means Initial Public Offering. They are selling stocks (ownership) to the PUBLIC.
A facebook friend of mine asked, "I think it would be better for people to own it than the government? Maybe then with shareholders that care, there would be pressure on lots of waste in the company? Your thought?"
To which I replied, Well for starters this IPO will be "one of the largest initial public offerings in American history." They are going to request for even MORE capital. We need to look at how they have invested the capital they received from the government bailout (61%) and how they intend to manage the new capital they'll receive with this IPO. We the people ALREADY OWN 61%. The federal government made that investment decision on OUR BEHALF WITHOUT OUR CONSENT! The government is making the decisions and NOT THE PEOPLE!
It does not say if they are issuing common shares or preferred shares. But if they are selling common shares, there is no investor protection. What I mean is if they screw up again, the common shareholder is at the bottom of the asset rung and will get totally screwed again. President Obama screwed over the Chrysler and GM bondholders when he bailed these two out. So what would make me think that an investment in GM would be viable?! Plus, I don't like the way they manage their business. Therefore, I would not invest in this company. Besides, the government is still going to be controlling 61% of GM and they have proven that even they can't manage large sums of money... OUR TAXPAYER MONEY!
Then another facebook friend commented, "I think GM needs to die its slow, agonizing death and be done with it. The gov't takeover was the terminal, inoperable brain cancer that doomed them. The IPO will be big, but so will their fall when they file bankruptcy in the next year or so. GM needs to die. Bankruptcy needs to occur."
To which I replied, well I wouldn't agree with death. But yes I do agree with bankruptcy and then starting ALL OVER from scratch. The Union entitlements is what is doing them in. The problem is the federal government WILL NOT ALLOW them to go through a normal bankruptcy process because they are protecting the Union bosses. So yes FAILURE is inevitable because it is not about doing the right thing and creating a lean mean manufacturing machine. It is about doing business as usual and as we've ALL SEEN their previous business methods have GROSSLY FAILED.
If our federal government didn't ALLOW for bankruptcy to occur before, it will not in the future. GM has the peace of mind knowing it can suck on the governments teat whenever it needs to so they have no intention on improving their business model.
**************************************************************
Auto Blog
written by Chris Shunk
July 24, 2010 at 11:09am
A year ago, General Motors needed a $50 billion U.S. government bailout to stave off liquidation. One year later, the Detroit-based automaker is on the precipice of filing for one of the largest initial public offerings in American history. Automotive News quotes unnamed sources who claim GM will file with the Securities and Exchange Commission by August 16. These anonymous sources reportedly added that the goal is to complete the company's IPO before the November elections - unsurprising when you consider the highly-political nature of The General's current status (the federal government holds a 60.8% stake in the automaker).
Assuming GM files by August 16 as AN's sources allege, the move would come just days after the company's second-quarter earnings announcement. If that's indeed the case, we think GM plans to announce a sizable profit for the quarter that ended on June 30. After all, there's nothing more unattractive to investors than a fresh batch of red ink on the ledger.
No comments:
Post a Comment