After early slide, GM shares stay on the road
Shares of General Motors Co. almost went into reverse Friday but a burst of well-timed buying prevented the stock from skidding below the price of its initial public offering.
A day after its ballyhooed IPO, the stock fell sharply in the first 30 minutes of trading alongside much of the rest of the equity market.
GM shares dipped to $33.11, just above the company’s $33 IPO price. Falling below that level, especially so soon after an offering, would be a black mark on the stock’s image.
The rebound simply could have been due to the general recovery in the market. The Dow Jones industrial average closed up 22.32 points, or 0.2%, to 11,203.55.
But could the big investment banks that underwrote the GM deal have given the shares a bit of help?
The banks have a stake in seeing the shares maintain their IPO level: Neither the investors who bought into the deal nor the federal government, which still holds a huge stake in GM, would be happy to see a breach of the offering price immediately after the IPO.
Whatever the case, GM shares remain in gear.
-- Walter Hamilton