G.M. Prices Its Shares at $33 in Return to Stock Market

[8cd03gro]

You guys act like 1.5B is a lot. . . For reference, F has an O/S of 3.6B IIRC which is why F market cap is higher than GM at this point, despite PPS being less than half. Mark this post, IMO that number will change drastically over the coming few years.

[Hylton]

Originally Posted by Dragoneye

It seems (from that article at least) that, the single biggest worry is nothing financial at all. It's whether they can keep the momentum from a "culture change".

Only someone prone to skepticism and not paying real close attention (not a fault, just an observation) could hold that as a real concern. They've changed, for sure.

Upper management - yes. Lower management? Hell no....

[DGthe3]

Originally Posted by 8cd03gro

You guys act like 1.5B is a lot. . . For reference, F has an O/S of 3.6B IIRC which is why F market cap is higher than GM at this point, despite PPS being less than half. Mark this post, IMO that number will change drastically over the coming few years.

I never commented on how much or how little 1.5B shares are, I'm just thinking about the most logical course of action over the next couple years.

Sure it can increase in the future, but not before the major shareholders of GM have sold off all, or at least most, of their stake specifically because of dilution. The goal is to get as much back to the major shareholders as possible, issuing new stock while they still 'owe' money to those groups would be incredibly stupid. Only ~30% was dumped last week. I don't expect them to sell off any more until after GM issues their annual financial report at the earliest. But however they do it, I expect the process to take around 2 years for the US government to sell off the rest of their stake, and who knows how long for the others. So if we figure that it would be ~2 years to have most of the 1.5B shares out on the market, it will still be some time after that until GM issues more stock of their own. Thats what I was getting at with 'any time soon'

[UCI CamaroFan]

Originally Posted by 8cd03gro

It is also conversion of warrants, verts and preferreds into common. Debt-equity conversions as well. SMO is also dilution assuming it's a follow-on. The # of common shares available is going to increase massively either way, and that's dilution.

That's not to say the current offering isn't a good long-term investment. However, to expect to see $5x.xx share prices within the next few years alone is ludicrous.

The number of shares available on the market will increase when the government sells, but they will not be issuing new shares so dilution is not going to happen. The current financial statements already take this into account. The only thing that will increase outstanding shares right now will be the convertible preferred shares.

[LOWDOWN]

In the meantime, the P/E ratio, an investor "staple", will be calculated against the "existing" share numbers IN TOTAL. As for potential Market Cap, that number is still a guess until substantive, and sustained, Earnings over a period of time are reported...and verified. Only then will it be possible for "real" growth to occur.

As stated earlier, this recent offering is but a small portion of what MUST come to market and, in anticipation of those additional "free market" shares, investors would be prudent to remain very cautious about "share value growth", near-term.