TEXT OF INTERVIEW
STEVE CHIOTAKIS: The opening bell rings on Wall Street in a little more than half an hour. And for the first time since its bankruptcy more than a year ago, GM will be trading shares. More than $18 billion worth of stock, making it the second largest Initial Public Offering ever.
Marketplace’s Stacey Vanek-Smith is with us live from our New York bureau with the latest. Good morning Stacey.
STACEY VANEK-SMITH: Good morning Steve.
CHIOTAKIS: Why are investors so excited about a company that went bankrupt just last year?
VANEK-SMITH: Well, the bankruptcy changed everything. GM got rid of billions of dollars in debt and especially so-called legacy costs. Those are things like employee health care and retirement. David Cole, with the Center for Automotive Research, says that’s probably saving GM about $5000 per car, GM just posted its first profit in more than six years.
DAVID COLE: Last quarter GM earned about $2 billion and we are still at a depression level of sales in this industry.
Cole says investors think that when the economy picks up car sales will too. There’s actually now a waiting list to buy GM stock.
CHIOTAKIS: What about the government’s stake in GM? We owned about 60 percent of the company.
VANEK-SMITH: Right, well the IPO will take the government’s stake in GM down to about 25 percent.
CHIOTAKIS: What about all the bailout money? Twenty-five percent — are we getting that $50 billion back?
MARK ZANDI: The auto bailout will probably cost taxpayers some money that’s only because we are impatient investors. If we held onto GM stock for longer, I think we would do well and at least be made whole.
Zandi thinks government will sell its shares quickly because it wants out of the car business and GM will probably be pretty happy to get rid of the Government Motors nickname.
CHIOTAKIS: Stacey, thanks.
VANEK-SMITH: Thank you.
CHIOTAKIS: Marketplace’s Stacey Vanek-Smith, reporting from New York.
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