GM finally back in the black
Published on Monday, May 17, 2010
The Detroit automaker said Monday it made $865 million during the first three months of 2010, the first profitable quarter since 2007 and a major victory coming out of bankruptcy reorganization last summer.
With a profitable quarter under its belt, anticipation is building about when General Motors will sell stock to the public again, allowing taxpayers to recoup their investment and eventually getting the government out of the car business.
"It was an extremely good first quarter for General Motors. Posting a profit and generating positive cash flows are important steps as we work to rebuild General Motors," Chief Financial Officer Chris Liddell said.
While Liddell tried to tamp down expectations about when a public stock offering could occur, movement is clearly occurring behind the scenes to prepare.
Joseph Phillippi, a longtime industry analyst, said Wall Street banks already are jockeying for a piece of the initial public offering. The U.S. Treasury reportedly has been interviewing investment bankers to advise it on a deal.
"The IPO is the ultimate goal of" CEO Ed Whitacre. "He wakes up every morning trying to figure out how to get the company closer to the IPO," said Rebecca Lindland, an industry analyst with IHS Global Insight.
GM IPO interest grows
Liddell spent Monday trying to hold back enthusiasm about when the Detroit automaker would sell stock to the public.
The company announced that its revenue had surged 40% during the first quarter compared with the same period last year and that GM generated $1 billion in cash after capital expenditures and expenses.
"I'm in the unusual position of probably just trying to keep people's expectations low on this topic," Liddell told analysts and reporters Monday.
GM could go public next year or by the end of this year, he said, reiterating previous statements. "The IPO will happen when the market is ready and the company is ready," he said.
Liddell acknowledged the growing interest: "There is a lot of excitement building."
GM's profitable first quarter is seen as a major milestone before such a deal could occur. One of the major questions for an IPO, however, could be out of GM's control -- the market.
Source : Tim Higgins, Free Press Business writer