I've got to hand it to these ivy league brainiacs...they sure know how to destroy stuff. The economy, the financial system, the government and the lives of the great unwashed. At the same time, they tell us they care about all of these things but they really don't. They lie. They lie to us and, I'm sure, some of them lie to themselves (and their families and friends). They are so smart and well educated, well spoken, and well heeled, too. And they live in their incubator world. They are spectators of our world as we are to theirs.
I think that their world is very comfortable, since they really don't need to work very hard. Do you think they know the meaning of "working your fingers to the bone"? I doubt it. Do they tie their own shoelaces? I wonder.
So here we have a bunch of wimps, sitting in their "ivory towers" dictating to us. I think it would be very easy to give them the ass-kicking these snot-nosed twirps deserve.
But I digress...Now these geniuses are going to put out an IPO for GM at a 20% discount. As reported by Reuters:
The U.S. government is likely to take a loss on General Motors Co [GM.UL] in the first offering of the automaker's stock, six people familiar with preparations for the landmark IPO said.
Subsequent offerings of the government's holdings may be profitable depending on how investors trade the newly listed stock, the sources said.
But the question of whether taxpayers are ultimately made whole on GM's $50 billion bailout could be left open for years, the people said.
So they are walking into this thing taking a loss and then they are hoping future suckers..er..investors will pay a higher price. And they still don't know if taxpayers will recoup their "investment". In order to do that they are going to spew the propaganda.
GM plans to begin a roadshow for its IPO immediately after the Nov. 2 U.S. midterm congressional elections, paving the way for a stock debut on Nov. 18, sources have said.
[snip]
"You have to sell people on the notion that there is an upside to what they are buying," one of the sources said.
[snip]
In its pitch to potential investors, GM will tout its global reach, recent gains in quality and pricing in its home market, and its sharply lower cost of operations after its 2009 bankruptcy, sources have said.
Some other guys from other ivy league schools crunched the numbers and after working diligently, I'm sure, they came up with this "projection":
Analysts and potential investors have projected a market value for GM of between $50 billion to around $90 billion, based on projections for the automaker's cash flow, comparisons with rival Ford Motor Co (F.N) and trading in bonds in the old GM which are convertible into shares in the new company.
A market value at the high end of that range would be above the roughly $70 billion in market capitalization that GM needs to achieve for the U.S. government to break even on its $43 billion remaining investment in the automaker.
That's a very optimistic outlook, however, there is reality:
But GM will have to address investor concern that growth in industry car sales in the U.S. in the second half of 2010 and into 2011 will likely be slower than analysts had expected just a few months ago.
If people have no jobs then they have no money. If people have no money then they can't buy cars. Der...it doesn't take a rocket scientist....
Then, buried at the bottom of the article, there is this gem:
At the same time, GM will have to confront a pension shortfall that remains a liability from its pre-bankruptcy operations.
GM eliminated about $40 billion in unsecured debt and other obligations in bankruptcy, but the automaker still needs to address a pension shortfall estimated at about $26 billion.
So it's true, the GM bailout was always about saving the union's pensions.
Maybe I'll buy some shares in Ford.
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