The IPO Buzz: Greatest Story Never Told

Here’s what we do know about the offering:

On Aug. 8, 2010, (the new) General Motors filed for an IPO to raise $100 million in common stock and $100 million in convertible junior preferred stock. The common stock is expected to trade under (the old) ticker symbol “GM.”

 

Morgan Stanley, J.P. Morgan, BofA Merrill Lynch and Citi were named joint-lead managers. Barclays Capital, Credit Suisse, Deutsche Bank Securities, Goldman Sachs, RBC Capital Markets and UBS Investment Bank were named co-managers.

 

On Friday, Oct. 15, its preliminary prospectus stated: “The number of shares to be offered and the price range have not been determined.” Also, all shares to be offered will be by selling shareholders.

 

After the offering, GM will have 500 million shares outstanding.

 

That’s it.

 

The rest of the over 500-page preliminary prospectus was filled with statements and data about the company.

 

Since the new GM filed to go public, a lot of stories have swirled around the deal, such as dollar amount to be raised, pricing date and more.

 

Claims have been published using unnamed sources and IPO “gurus” that the deal could be the largest U.S. IPO ever or the second largest. That might be stretching things a little.

 

Consider: The largest U.S. IPO was the March 2008 Visa (V) offering of $17.9 billion when the company priced 406 million shares at $44 each, according to the U.S. Securities and Exchange Commission’s filings. The second largest was the April 2000 AT&T Wireless offering of $10.6 billion when the company priced 360 million shares at $29.50 each.

 

With 500 million shares outstanding and if all shareholders were to sell their entire holdings, then the GM deal would have to be priced at $35.81 per share to become the largest U.S. IPO ever. For that matter, to become the second largest, the deal would have to be priced at $21.22 per share.

 

GM Chairman Edward E. Whitacre, Jr. was reported as saying it would be his guess that the deal’s offering price could be in the range of $20 to $25 per share.

 

The GM filing was for $100 million.

 

Again, unnamed sources and IPO “gurus” have placed the deal’s pricing date in November and one even went so far as to pinpoint the date as Nov. 17, according to “informed sources.”

 

Note: Until GM announces its pricing terms and sets its road show, nobody can accurately say when the deal will be priced. But not to worry, when it does happen, it will be a major financial news story.

 

The drumbeat continues for the IPO market.

 

For this week, Oct. 18, the new-issues calendar lists six deals and another five for the last week of October. This time last week, Oct. 11, the IPO calendar listed one deal for the week of Oct. 25.

 

And the 2010 traffic continues.

 

Since the July 4 break (through Oct. 15), 90 companies have filed plans to go public. This was nearly doubled over the same period of a year ago. Since the July 4, 2009 break (through Oct. 16), 52 companies had filed plans to go public.

 

With the pending GM offering – whenever it happens – plus some interesting names in the IPO pipeline, such as Skype S.A., Zipcar and a few others, the new-issue calendar’s run to year’s end could be interesting.