GM Stock Rises in First-Day Trading
General Motors Co. shares rose modestly in their first day of trading Thursday after the car maker’s historic initial public offering gave investors their first chance to buy and sell GM stock in more than 18 months.
The shares opened 6% higher as GM Chief Executive Danieal Akerson rang the opening bell on the New York Stock Exchange. In midday trading, the shares were ahead almost 7% [34,07$].
It will take more than the IPO to win back consumers who shunned GM due to its bankruptcy and bailout, said Jessica Caldwell, senior analyst at car-shopping site Edmunds.com. « The only thing that is truly going to do the trick is time, » she said.
The government needs GM shares to rise sharply over the coming years for it to be repaid in full. While the U.S. has agreed not to sell additional shares for six months, after that it is expected to gradually offload the rest of its stake.
With Wednesday’s sale, including the overallotment, the Treasury lost roughly $4.5 billion on GM shares it acquired at an effective cost of $43.84 apiece. The Treasury would need to reap $26.4 billion, or an average of $52.79 a share, on its remaining stake to break even.