The General Motors (GM) IPO is now the largest ever, following the expansion of the offering by the underwriters.
The company announced Friday that "the underwriters have exercised in full their over-allotment options to purchase an additional 71.7 million shares of common stock from the selling stockholders, for a total of $2.37 billion, and an additional 13 million shares of mandatory convertible junior preferred stock from the company, for a total of $650 million, in connection with the previously announced public offering of common and mandatory convertible junior preferred stock of General Motors. The exercise of the over-allotment options brings the total offering size to $23.1 billion."
The firms include Morgan Stanley (MS), JP Morgan Chase (JPM), Bank of America (BAC), and Citigroup (C). According to Reuters, "The added shares vaulted GM past Agricultural Bank of China's $22.1 billion IPO in July and underscored the strong demand for the taxpayer-rescued automaker's stock."
The market's attention can now turn to the value of the shares. The stock has traded between $33.11 and $35.99, and are now at the lower end of that range -- $33.80.
The acute concern of traders is that the U.S. and European car markets may be slow to recover and a prolonged period of economic stagnation could hurt the company's earnings prospects. GM has had particular problems with its Opel and Vauxhaul operation in Europe.
GM's bright spot is in China, where it is among the top sellers. But, because China is now the world's largest car market, it has become increasingly competitive. For example, Ford (F) has announced that it will open 66 dealers in the People's Republic.