GM has had a fantastic second quarter, reporting a $1.3 billion profit. That "set[s] the stage," reports Bill Vlasic for The New York Times, "for the automaker to file for an initial public offering, possibly as soon as Friday." How well GM stock does, he explains, "will determine how much money American taxpayers will recoup from the $50 billion government bailout of G.M." There's plenty to celebrate, but bloggers are also quick to point out some unanswered questions.
- Give Obama Some Credit "Failure to get props from the press or the right (or the public)," writes Time's Mark Halperin, "for his calibrated intervention in the U.S. auto industry is Exhibit A in the presidential case of frustration about not getting credit for his actions."
- 'The Big Question' It's unclear "how many shares will be sold and at what price," notes Jon Ogg at 24/7 Wall St. "We areexpecting somewhere around $15 billion per discussions we have had with others." But the "big question," he says, is this: "Will the GM IPO become a busted IPO right out of the chute like so many others have?"
- Where Will the Proceeds Go? So if GM goes public, what will they do with the money? "It's assumed that most of the capital will go to the U.S.," writes Douglas McIntyre at DailyFinance, "but GM may also have further plans to expand or to underwrite its growing business in China. GM also needs money to bolster its Vauxhall and Opel operations in Europe."
- Good News, Bad News The good news is that part of the profit came from revenue, points out The Atlantic's Derek Thompson, and the company's North American market is looking strong. "Any indication that the American consumer is actually breathing out there is nice to hear." Of course, it's important to remember this:
The dark cloud for tax payers is that an IPO won't end the government's significant stake in the company. As the Michigan Messenger reports, the federal government will reduce its stake in the company from about 60 percent to below 50 percent in the initial IPO, and sell off the rest of the taxpayers' stake in the company bit by bit.