General Motors Co shares traded up 7 per cent today, in a dramatic market return for the top US carmaker that comes less than a year and half after it emerged from a government-funded bankruptcy.
The shares opened at $35, above the initial public offering price of $33 and rose as high as $35.99 in early trading.
GM shares began trading on the New York and Toronto stock exchanges with the rev of a Camaro engine on the floor of the New York Stock Exchange taking the place of the traditional ringing of the bell.
The start of trading in GM shares represents the last step in a blockbuster initial public offering negotiated by the Obama administration that raised $20.1 billion after pricing the automaker's shares at $33 each.
The IPO caps the first stage of a turnaround that has taken the 102-year-old automaker from near-death in 2008, via a 2009 bailout, to unlikely Wall Street flotation favorite in 2010.
Obama administration officials said the strong market debut for GM showed they made the right choice in restructuring the auto maker with $50 billion in financing.
"This is a bit better than people had been projecting. As to a year ago. it's not even in the same ballpark," Ron Bloom, the US Treasury official in charge of the GM investment told Reuters. "A year ago, people said 'you have no exit, you have no strategy. This company is not fixed.'"
The GM rescue left the Treasury with a 61 per cent stake and the carmaker with the embarrassing nickname "Government Motors". After the IPO, the US government sale could drop to 33 per cent.
The IPO values GM at about $63 billion. Including an option that would allow underwriters to sell more shares, GM looks set to raise $23.1 billion, eclipsing the record $22.1 billion raised by Agricultural Bank of China in July.
The team of GM executives led by chief executive Dan Akerson that pitched the IPO to investors said they recognised their job in transforming GM was not done.
"We have to celebrate on the run here," GM North America president Mark Reuss told Reuters. "It's a big day to become a public company again but we have got to just hit the ball out of the park here every day on product."
Chief financial officer Chris Liddell said the automaker's goal was to pay down all of its remaining debt and fully fund its pension plan, removing one of the concerns investors had cited heading into the IPO.
"We are in a good position to do that over the next few years," Mr Liddell said.
At $33 a share, the partial sale represents a loss of about $9 billion on taxpayers' original investment, assuming the extra shares go at the same price.
In Europe, the IPO news pushed auto stocks higher.
"It's absolutely remarkable how the sentiment has totally changed over such a short time period, said trader Stefan de Schutter of Alpha Trading brokerage said.
Reuters