GM Said to Consider Sale of Preferred Stock Along with its IPO
NEW YORK - General Motors Co. may sell preferred stock alongside its initial public offering of common shares, reported Reuters based on a draft of its regulatory filing and two people briefed on the plan.
GM would get proceeds from the preferred offering and will not sell shares itself in the common offering, according to the draft and the people, who declined to be identified because the filing hasn't been publicly released.
The automaker, 61 percent owned by the government, will seek to raise $12 billion to $16 billion in the IPO, a person familiar with the plan said last week. The U.S. Treasury will sell some of the shares it holds in the company, the people said.
The offering, which may be filed with the Securities and Exchange Commission today, would be the second-largest in U.S. history, behind Visa Inc.'s $19.7 billion IPO in March 2008. Outgoing CEO Ed Whitacre has pushed to end government ownership of the company, which received a $50 billion taxpayer bailout following its bankruptcy in June 2009.
“They can hopefully generate enough funds to help operations,” said James Bell, executive market analyst at Kelley Blue Book in Irvine, Calif. “But the more important issue for them is to reduce the government's position, in terms of the company's public image.”
The preferred shares were added to attract hedge funds and other new investors because the shares have attributes of both debt and equity, the people familiar with the plans said.
Randy Arickx, a GM spokesman, declined to comment, as did Mark Paustenbach, a spokesman for the Treasury.
More Industry

Pennsylvania Dealership Under New Retailers
The sale of the Chrysler Dodge Jeep Ram store puts a family auto group on a leaner path as first-time dealers take the helm.
Read More →
Battery Storage Takes Priority Over EVs
U.S. automakers are prioritizing battery energy stationary storage over electric-vehicle production as the consumer demand for EVs lags the rest of the world.
Read More →
Auto Dealers Feel Better But Not Great
A second-quarter Cox Automotive poll of franchised retailers and independents found better views of the current market after a good spring but anticipation of third-quarter storminess.
Read More →
New-Vehicle Sales Picture Relative
A May forecast is complicated by last spring’s trade tariff effects on auto retail. Despite continued hard realities, many consumers took advantage of ways to bite the bullet.
Read More →
Auto Group Acquires Third Nissan Rooftop
Iowa-based Coleman Automotive Group recently acquired its seventh dealership, McGrath Nissan, which it renamed Nissan of Elgin.
Read More →
April Less Affordable
Based on prices, reduced incentives and slower household income growth, consumers found it more challenging to buy new last month, Cox Automotive reported.
Read More →
Building an Extraordinary F&I Agency
Work to determine your specialized talent, because that fact will determine everything about your agency’s future.
Read More →
Recipe for Compliance
The secret to both amazing barbecue and compliance is the same: understanding the basics and committing to a process.
Read More →
EVs Getting More Attractive
A growing percentage of U.S. consumers are open to switching and fewer are adverse to the idea, according to a recently completed survey. That’s despite the end of a tax break.
Read More →
EV Sales Drop in April Following Surge
North American electric-vehicle sales were down 28% year-over-year, a sharp contrast from global EV sales growth of 6%.
Read More →