Source: GM may raise target price of IPO

Associated Press

DETROIT

Strong investor demand for General Motors stock may prompt the automaker to raise the target price range for Thursday’s initial public offering, a person briefed on the matter said Monday.

GM said earlier this month the common stock would sell for $26 to $29 per share and preferred shares would go for $50 each. But demand for the shares is now causing the automaker to rethink the pricing, although no decision has been made, said the person, who asked not to be identified because of not being authorized to speak publicly on the issue.

Scott Sweet, senior managing partner of the research firm IPO Boutique, said investment bankers have told him the final price for the common shares likely will be $30 to $30.50 when it is announced Wednesday after stock markets close.

It was unclear whether the price of the preferred stock, which would pay a dividend of 5.5 percent to 6 percent and be converted to common shares in 2013, would change as well.

The Wall Street Journal, citing a person it did not identify, reported Monday that the new common share price range probably would be from $31 to $33.

GM spokesman Selim Bingol would not comment on any possible price increases, which could be announced in a filing with the U.S. Securities and Exchange Commission.

GM’s owners, including the U.S. government, are selling 365 million common shares, and the company plans to sell 60 million shares of preferred stock.