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GM Selling Stock, Shares

GM Selling Stock, Shares - General Motors Co. is on pace to sell $18.1 billion in shares in what likely will be the second-largest U.S. initial public offering ever, capping a remarkable two-year turnaround in which the car maker went from begging for a government bailout to posting its first steady profits in more than six years.

GM sold about 478 million shares Wednesday at $33 each, a price higher than the company and its bankers thought was possible just days ago. An additional 71.7 million shares are expected to be sold by GM's bankers as part of an "overallotment" allowed when sales are stronger than expected. And it sold $4.35 billion in preferred shares.

Wednesday afternoon at the Manhattan headquarters of one of the lead bankers, Morgan Stanley, GM executives were greeted by traders and bankers standing and cheering while wearing blue GM T-shirts over their shirts and ties.

Buyers of the GM shares included giant pension and hedge funds as well as GM factory workers and retirees. Among foreign buyers was China's largest car maker, SAIC Motor Corp., which is GM's biggest partner in the world's largest auto market. SAIC bought about $500 million of shares for a GM stake of close to 1%.

The proceeds will help pay back the U.S. government for the $49.5 billion it spent on its controversial rescue of GM, which has gone from losing billions of dollars a year to making $4.07 billion so far in 2010. The Detroit company, after eliminating half its eight brands, slashing its debt and trimming its work force in bankruptcy, has been gaining U.S. market share with strong-sellers such as the Chevrolet Equinox and Buick LaCrosse after years of seeing customers slip away to foreign-based rivals.

The U.S. Treasury will cut its ownership stake in GM to about 26% from 61% through the stock sale, including the overallotments. That could ease the "Government Motors" taint that had turned off some car shoppers as well as potential GM investors.

GM Selling Stock, Shares
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