Public Poll: Will You Buy the Ally Financial IPO?

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Ally Financial Inc. is soon to become a public company again. The taxpayer has a stake here in this auto lender, considering that the U.S. government will be selling the majority of its stake held since the bailout. The proposed sale of stock will be for up to $3.06 billion if the full number of shares (including the overallotment option) are sold.

If the IPO market holds up and if the pricing comes at the indicated levels, the U.S. Treasury will have turned a profit. The U.S. Treasury is offering 95,000,000 shares of common stock in this offering, currently pegged between $25.00 and $28.00 per share. Ally’s last amended filing used 481,500,794 shares outstanding for calculation purposes.

Ally was bailed out for roughly $17 billion, and taxpayers have already recovered over $15 billion prior to the IPO. This new $3 billion or so will put the Treasury in the black on the bailout.

All pondering and historic bias aside, the real question is simple to ask but may not be a simple answer – As of now, would you be willing to buy Ally shares at the current terms?

For starters, the Treasury’s pre-IPO stake is almost 37%, but after the IPO it will be about 14% if all shares are sold in the offering.

Ally originally filed in early 2011 to come public, but market conditions got in the way. Now it looks as though the offering is going to make it, so long as market conditions allow it.

The underwriting group is massive. Ally’s joint global coordinators and joint book-running managers are Citigroup, Goldman Sachs, Morgan Stanley and Barclays. Its joint book-running managers are listed as Bank of America Merrill Lynch, Deutsche Bank Securities, and J.P. Morgan. The list of co-managers seems to include almost every firm you can think of: Sandler O’Neill, Keefe Bruyette & Woods, Credit Suisse, Stifel and literally 10 other firms.

Outside of the U.S. Treasury, activist Dan Loeb owns a 9.5% stake via his Third Point LLC. Affiliates of private equity firm Cerberus Capital Management own another 8.6% stake. Both Third Point and Cerberus are not selling in the offering.

Ally is one of the largest standalone auto finance houses operating with its Dealer Financial Services, for both wholesale and retail. It counts itself as the 19th largest U.S. bank holding company based on total assets. The company’s SEC filing shows that its assets were $151.2 billion of total assets and $52.9 billion of bank deposits as of December 31, 2013. At December 31, 2013, Ally had a Tier 1 capital ratio of 11.8% and a Tier 1 common ratio of 8.8%.

Net income was $361 million in 2013, down from $1.196 billion in 2012. Total net revenue was $4.263 billion in 2013, down from $4.465 billion in 2012. This was from Ally’s 11th amended filing and we have a poll for you to take below.