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U.S. to limit foreign investors in GM IPO?

By: Chris Paukert
September 5, 2010

According to The Wall Street Journal, members of the U.S. Treasury are worried about General Motors' upcoming IPO. They aren't concerned for the automaker's stock price, or how even how many investors may decide to buy into the company – they're concerned about what country the money is coming from.

The Journal suggests that government officials are considering whether to limit or select which non-U.S. investors would be invited to be so-called "cornerstone" investors in GM's IPO. Cornerstone investors are sought out to purchase and hold sizable stakes in a given company at a set share price. Said price is often lower than what the general investing public can secure, the theory being that the cornerstone investors' presence (and the stability it implies) serves to drive confidence in the company. The fear is that there could be considerable political fallout if, say, some of those cornerstone investors turned out to be from nations like China. Either way, GM will need to firm up its investment plan fairly quickly if it is to allow enough time to court the 'right' cornerstone buyers.

As GM readies its IPO pitch, another key element in the company's talking points will be its long-term stability – including a chief executive officer who plans to stick around a while. New GM CEO Dan Akerson has reportedly told the board that he'll stay at the helm for two to five years

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