Government Motors Corporation IPO filing and plans to sell equity of 20% in the struggling company to raise $16 Billion Dollars is being met with skepticism.
It wasn’t terribly long ago when Government Motors were running sappy ads claiming that it had repaid the taxpayers back “in full, with interest, five years ahead of schedule.” While there were some that believed GM was no longer indebted to the taxpayers, the fact of the matter is the nationalized auto company was only returning taxpayer dollars to the U.S. Treasury and Canadian Government despite what they’re misleading and deceptive ads were otherwise saying.
Should Investors have confidence in the new GM to tell the truth or is the IPO filing nothing more than a scheme by Obama Motors Company to swindle even more money from the public to shore up their union pension plans in disguise?
The Initial Public Offering (IPO) document filed with the Securities and Exchange Commission on Wednesday reveals challenges that may discourage investors according to Money Morning from its underfunded pension plans by $27 Billion Dollars to its expectations of declining markets in both the United States and China, the risk factors may outweigh the reasonable expectations of actual success of a company which had a string of 10 straight quarterly losses (during the second quarter of 2009 the company reported a $12.9 Billion Dollar loss when the automaker was in the midst of its United Sates Bankruptcy filing) Zacks Investment Research
General Motors under capitalization in Europe and efforts to repair money losing operations continues to cause anxiety with investors. Creditors across the pond may force the company into bankruptcy to protect their assets.
Taxpayers should not be given any unreasonable expectations that Government Motors may be able to begin repaying their debt obligations to the U.S. Treasury.
Amid fears of a double-dip recession falling consumer confidence, gloomy manufacturing data and an unexpected surge of 500,000 unemployment claims this week, the timing of the IPO offering by GM is dubious.
