GM Earnings Report Sets Tone for IPO

General Motors, or Government Motors, has two key data points for today.  First is the earnings report.  Second is that it is about to formally file for its initial public offering.

Revenue rose 43% to $43 billion; Net income was $1.3 billion, EBITDA was $2.0 billion, and EPS was $2.55; Cash flow from operating activities was $3.9 billion and after adjusting for capital expenditures of $1.1 billion, free cash flow was $2.8 billion.

Total car production in North America was 731,000 units versus 395,000 unit.  Total cash, cash equivalents and marketable securities came to $31.534 billion.

Most accounts on the web are calling for a Friday filing for the IPO.  CNBC reported yesterday that Friday would be when the filing comes.  We now know the financials, so all that really needs to be seen in the IPO is how many additional firms will get to be in as part of the syndicate.  The other issue is how many shares will be sold and at what price.  Bloomberg has reports of $12 to $16 billion as the amount raised.

We are expecting somewhere around $15 billion per discussions we have had with others.  Here is the big question… Will the GM IPO become a busted IPO right out of the chute like so many others have?

The company recently secured a new $5 billion credit line and when the IPO will actually come, that may be as long as 45 to 60 days after the filing and will be somewhat dependent upon market conditions.

You can join our free daily email distribution list to hear more about dividend trends, analyst upgrades and downgrades, top day trader and active trader alerts, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG