GM: Grand Miracle, Grand Milestone, Grand Mania or Grand Misery?
The car salesman had done his job and the client was willing to buy this apparent bargain. After all, with so much to liquidate in a poor market, it had to be priced to sell.
Then, like in the most improbable movie script, everything seemed to line up favorably. Toyota had already made a nice contribution to the scenario, losing significant market share in the US, Europe and Asia over the past year, helping GM sell more cars under four brands than it did little more than a year ago with eight. Then, the equity market staged a 17% jump between the end of August and November 8, in sync with the automobile market which sprung back to life in September and October. GM had also well timed the launch of its new Chevy Cruze. Its Chevy Volt was named as Motor Trend’s Car of the Year and Automobile Magazine’s Automobile of the Year. And just to make sure, GM adopted a very aggressive pricing strategy, right up to the IPO.
For a fleeting moment, there was the prospect of making this an internet-like IPO, letting the stock jump spectacularly at the opening. So far this year, IPOs have surged 12-15% off the gate.
