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General Motors long awaited IPO began trading on Thursday, and was up approximately $2 as of 12 noon, Thursday. Listed at $33 a share, the stock price quickly climbed to $35 a share, as GM’s CEO Dan Akerson rang the opening bell at the New York Stock Exchange.
IPO’s are often volatile, with new startup Tesla Motors stock price dipping to around $15 over the summer, and now trading at over $30. The original GM stock was once one of the world’s most popular stocks before GM was forced into bankruptcy in 2009. With the IPO, the United States Treasury was able to unload 75% of their shares and recoup $12 billion of taxpayer money. GM stock would need to rise to $41 a share for the government to break even on its bailout.
[Source: Left Lane News]
Most of us are probably more comfortable looking at a dyno graph than any sort of financial data, but believe it or not, the AutoGuide staff actually have interests outside of cars, and for some of us, that includes finance.
The Tesla IPO was one story that came to our attention, as it was the perfect nexus of technology, automobiles and financial markets. Tesla has gotten a lot of publicity among the IPO happy tech-crowd – the same one that was responsible for two equity bubbles this decade, but not a lot of love from the car or business community, who are skeptical of a company that has promised the moon but delivered relatively little.
As you can see from the chart, the Tesla IPO opened at $17, and rocketed up to $30.41. The stock is now worth $16.63. Seeking Alpha, another financial blog, claims that some of the up and down patterns at the very top of the graph indicate that the stock is being flipped quickly and constantly by speculators (perhaps the computerized HFT machines) looking to make a quick profit by taking advantage of the minor price differences throughout the day. This is in stark opposition to the received wisdom that eco-conscious small-time investors would buy and hold the stock due to the cachet and “green” disposition of the company.
Aside from the usual Wall St. market manipulation nonsense analysts are taking an increasingly skeptical view of Tesla Motors; the company’s product plans are hazy, the delays constant and the volumes low. The reports coming out of the media that Tesla executives are treating it like a “Silicon Valley venture” rather than a company that makes tangible products is worrisome for some, but all we can do now is sit back and track it. What’s most interesting is how Toyota will fare in this situation. It traded its NUMMI plant for $50 million in Tesla stock, and if it goes belly up, Toyota will have to eat a substantial loss.