G.M. Prices Its Shares at $33 in Return to Stock Market

[Hylton]

The current price of the stock means little really. Just wait until the dilution comes - 2/3rds of the stock is not even being floated right now.

[HeHasReturned]

Originally Posted by 8cd03gro

What are you talking about? Do you understand what a market cap is? From an investment standpoint, at this point in time, Ford is valued higher. Period. It's mostly because of debt and bad public image of GM, but it's a fact. Do you think because Google trades in the $600 range that it is worth 23 times Microsoft, which is trading around $26 right now? LOL! If you don't account for number of outstanding shares, pps means jack.

Dude, Chipotle trades at a whopping $230 per share. That's about 58 times as much as Citigroup, therefore Chipotle is worth 58 times as much as Citigroup. Finance 101 right here, everyone knows this stuff.

[Hylton]

Originally Posted by HeHasReturned

Dude, Chipotle trades at a whopping $230 per share. That's about 58 times as much as Citigroup, therefore Chipotle is worth 58 times as much as Citigroup.

Not quite. What is the P/E multple? How many shares are floating?

[el ess A]

Originally Posted by Hylton

Not quite. What is the P/E multple? How many shares are floating?

Currently, the P/E for GM should be N/A. Unless you wanted to show a negative number. Which wouldn't make sense as it would appear that GM would be paying you to own their stock. P/E is simply a calculation. And GM is still too "new" right now to have much meaning, and like Hylton says, are they counting the shares still in the closet as outstanding or not?

In contrast, Ford's p/e is roughly 10. (16.17/1.67) So as an investor, you're paying 10 bucks for every dollar of earnings over the next year. Is this too much? My own philosophy says if it's above 10, it's a bit high, but still might be ok. If it's above 20, I'm beginning to wonder.

Price per share/earnings per share is your P/E. The higher this number, the more hope investors have of the earnings increasing since their purchase of the stock. Or it's overbought. Where that line is would be anyone's guess.

This is the most popular metric for stocks, but it's only ONE facet of investing and doesn't tell the entire story of a stock. You need a lot more info to make a better choice.

And I seriously hope HeHasReturned was only kidding about the Chipotle example. If he's investing like that, there's no help for the markets...

[8cd03gro]

He was being sarcastic in reference to 2ndgen's statement that GM is worth twice as much as Ford based on pps.

[LOWDOWN]

Ask yourselves this:

When the IPO pricing was "suggested" @ $26-29/share, awhile back, what happened in the interim to suddenly make it "worth" $33? Let alone $35.99? Did GM suddenly increase sales/market share by 38%? Did its profits soar beyond "reasonable expectations"? Were there any truly stunning developments beyond an "interim" 3rd Quarter statement (just in time for the actual IPO), whose results will likely be moderated overall by Year End?

"Emotion". Wall St.'s favorite kool aid...

[Hylton]

Originally Posted by LOWDOWN

"Emotion". Wall St.'s favorite kool aid...

Lol.... yup. In any event, I hope people know that yesterdays proceeds went to 3 groups only - US government, Canadian government and the UAW. GM took zero dollars in because they did not sell any of their shares.

[syr74]

Originally Posted by el ess X

Ford's EPS is only 1.67......hahaha

Oh, wait....GM's EPS is -58.56. Doesn't mean much right now, but we'll see at their next earnings statement.

An IPO with only a 3.5% increase after day 1 isn't what I'd call much of an IPO jump. At least they picked a good day when other factors lifted the market today.

If I were going to own either stock right now, it wouldn't be GM's, unless I was going to sell what I got today at 33 at whatever it opened at tomorrow. Otherwise I got a feeling it'll be worth less than 33 by the end of tomorrow. The other way I MIGHT own it is if I was going long. Maybe keep it a couple of years.

I'm a huge fan of the cars/trucks, but NOT a fan of GM's stock. Not right now anyway. My guess is after the honeymoon, GM stock will be around 25 or so by the end of the year.

Let me add this: I do hope they make good with the stock, but I'm not going to hold my breath.

Best post I've seen in this thread yet. Wherever your automotive loyalties there is a reason for where market caps are set, and in this case they are what they are for very good reasons. GM has done a great job of getting their shares above 30 dollars per share for the IPO, but there is absolutely no way they are going to stay there.

[Russell James]

Supply and demand. They threw out a test number, the market showed a much higher demand. So they increased the supply and price.

Based on the price closing fairly flat on IPO day, I'd say they nailed the IPO pricing strategy.

If it were to shoot way up, it would have been way undervalued and the entitities selling their shares would not have received max value for selling their shares in the IPO.

The price is primarily a function of what the market is willing to buy it at.

[LOWDOWN]

There are folks who wouldn't touch GM stock @ $26/share...not with a ten foot pole. And there are folks who would have gobbled it up @ $50/share. Those who paid $35.99 will not likely, long term, add to their 401(k)...

The benefactors in all this? The "Group of 6" who floated this, and any time Goldman Sacks is involved likely means your interests come second...

[2ndgenz28]

Originally Posted by 1bad65

I expect people to be civil in discussions no matter who drives what. But I guess that's too much to ask of some people.

And I'm not a "Furd fan boy", I'm a car guy. I just happen to own a Ford Mustang, and a Jeep as well.

Again get a clue, some may tolerate you but don't expect hugs as long as you support the enemy camp with your buying dollars.

[1bad65]

Originally Posted by 2ndgenz28

Again get a clue, some may tolerate you but don't expect hugs as long as you support the enemy camp with your buying dollars.

Do what?!?!

[ViperTomcat]

Originally Posted by 2ndgenz28

Again get a clue, some may tolerate you but don't expect hugs as long as you support the enemy camp with your buying dollars.

Excuse me?

You ****ing get a clue. He's not an "enemy" because he bought a Ford. He supported an American company, just as every other Camaro and Challenger owner did.

But if people who by Ford and Mopar's are "enemies" then please, gladly place me into the enemy camp. Nothing makes me happier than opposing tools like you.

[8cd03gro]

Originally Posted by 2ndgenz28

Again get a clue, some may tolerate you but don't expect hugs as long as you support the enemy camp with your buying dollars.

Funny you say, "get a clue" when you have been blowing smoke out your ass in all of your posts in this thread.