August 21st, 2010 
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General Motors Co. on Wednesday took a significant step towards shedding government ownership by filing the first batch of paperwork required to sell stock to the public.
The 700-page filing will lead to an initial public offering (IPO) of General Motors’ stock. The paperwork brought into notice the reasons why GM would prove to be attractive to the investors, and what all risks the company face or can possibly face.
From Timesofindia.indiatimes.com:
GM didn’t say how many shares would be sold or when, although experts say the IPO could come as early as October. It also didn’t say how many shares GM’s majority owner, the US government, plans to sell. Those sales would eventually lead to the government shrinking its big stake in the automaker, something GM is eager to see. The company’s outgoing CEO, Ed Whitacre, has said government ownership has hurt GM’s public image and sales.
Under the plan filed on Thursday, GM said its stakeholders initially will sell common stock, while GM will sell preferred shares, which are like bonds and include dividend payments. GM said it will use proceeds from the preferred stock sale for general corporate purposes. It offered few other details.
GM would have to bring in $70 billion just to pay back all of the automaker’s stakeholders. That could come in several sales over months.
Francis Gaskins, president of IPOdesktop.com, said GM’s decision to sell preferred shares rather than common stock is a sign that GM is facing trouble in attracting investor interest and felt the requirement to sweeten the offering with the preferred dividends.
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