The off-shore investors are lining up to get chunks of the new stock offerings.
In simple terms, as shares increase in number, their individual value becomes questionable - much like a country printing money without reserves (gold, etc) to back it up.
This will provide GM with some breathing room, but not much considering the size of their retiree debt.
In fact, even though GM is setting aside 5% of the new stock for retirees to purchase, their financial advisors are telling them to avoid the new stock at all costs, since the company is only months out of bankruptcy with little to support their claim of a rosy future.
Today's market is not like the one we had 10 years ago. This IPO of GM stock will enter the world with lots of fanfare and tons of large investors lining up, which will drive the initial price up a buck or two. But in the end, the value will seek its own level based on the current economy and GM's ability to grow its overall value.
The only way they can do that is to build products people can afford and make money for their investors.
Of course, that is what they have been trying to do for the last 10 years..............Hhmmm, so how is that working out for them???
