Posts Tagged ‘IPO’
General Motors (GM) Returns to Market (Don’t Get Lost in the Pink Sheets!)
By Jared A Levy
MTLQQ – “Motors Liquidation Company” – is the somewhat cumbersome ticker symbol for the entity that was set up to liquidate General Motors’ assets in bankruptcy. It is in no way shape or form connected to the “new GM” that will begin trading later this year. According to Reuters, this new GM will be dually listed on the New York Stock Exchange as well as the Toronto Stock Exchange between late October and Thanksgiving of this year.
The preliminary GM initial public offering (IPO) filings have taken place. This is expected to be a relatively large offering with some estimates above the $20 billion mark (although this is still unknown). The company will also reclaim the old “GM” symbol (naturally).
Understand that the IPO of this new entity is almost like bringing a new company public with only half a year of earnings data to consider. Since restructuring was complete, GM has released just two quarters of earnings data. Remember, this company was on a trajectory for complete failure before being saved by the U.S. government/taxpayers and others. There are arguments on both sides of this offering. Some are projecting success, while others think it couldn’t be a worse time to bring this company to market.
Tesla (TSLA) Drives onto the Nasdaq
by Jared Levy on June 29, 2010
Shares of Tesla are expected to hit the public stock market today with a $244 million offering. Tesla will be the first American automaker to be listed on a major exchange since Ford Motor, which went public in 1956. But before you get all excited, be sure you do your homework. Keep in mind that Tesla has yet to turn a profit (since its 2003 inception) and is coming to market amidst some serious global economic headwinds, not to mention a very finicky car-buying public.
As a car NUT myself (and having owned many exotics and regular cars alike), I can tell you that the car business is a tough one to break into. Companies like Ford, GM, Toyota (even with its recent issues), Mazda, Mercedes, BMW, Honda, Subaru, Renault, and many others with similar pedigrees hold a firm grip on the average car buyer these days. These companies are established and producing reliable and sometimes pretty sexy cars with vast networks and marketing machines.
So why, especially in times of economic uncertainly, would anyone want to go out and buy a $100,000+ niche car? Tesla basically has two models available now, both in the six-figure range. They both look like Lotus Exiges, just with electric power plants. Personally, I would rather save $30,000 and buy the Evora.
I did the math and at $2.60 per gallon, with the Evora’s mpg rating, driving 10,000 miles per year (probably much less with a specialty car such as this in reality) would cost about $815 in petrol annually. Heck, even if my gas bill hits $2,000, I could drive the Evora for 15 years for free before the fuel savings would justify the additional $30,000 for the Tesla. Granted, there is a market for cool expensive supercars, which I guess the Tesla fits into, but does a “novelty” car company offer real shareholder value?