General Motors back in the game
General Motors shares shot up as much as 9 percent on Thursday as investors bet that the top U.S. automaker can make a lasting recovery as it returns to private ownership after a blockbuster IPO.
GM shares began trading on the floor of the New York Stock Exchange to the sound of a revving Camaro engine, taking the place of the traditional ringing of the opening bell.
By early afternoon, more than 165 million shares had traded, more than triple the amount of trading in Citigroup Inc., the next most actively traded stock.
The start of trading in GM shares is one of the final steps in an initial public offering process negotiated by the Obama administration that raised $20.1 billion in common and preferred shares, making it the biggest IPO in U.S. history.
The IPO caps the first stage of a turnaround that has taken the 102-year-old automaker from near-death in 2008, via a 2009 bailout, to unlikely Wall Street flotation favorite in 2010.
A successful stock debut may help the Obama administration argue that the controversial $50 billion taxpayer bailout of GM was worthwhile, analysts have said.
The government has estimated that an industry failure led by a GM collapse would have cost 1 million jobs, including suppliers, and would have reduced U.S. GDP by 1 percent.