The Battle for GM 1910-1915

Thanks to heavy demand, the GM IPO has been increased by 31% to 478 million shares.

An overallotment and an offering of preferred shares may increase the total amount raised to about $22.7 billion. Agricultural Bank of China Ltd.’s $22.1 billion initial sale is the largest common-stock IPO in history.

The initial sale, scheduled for today, will bring Chief Executive Officer Dan Akerson closer to his goal of returning the $49.5 billion GM received in a taxpayer bailout last year. The Treasury, which is taking a loss on its portion of the sale, will break even only if the shares climb at least 60 percent, Bloomberg data shows.

One of the most exciting and rollicking periods in Wall Street history was the battle for control of GM between 1910 and 1915. Billy Durant had founded the company but was tossed out by the bankers in 1910. He then partnered up Louis Chevrolet to start Chevrolet. He soon bought him out, then bought a controlling interest in GM and by 1916 was president again. In 1914 shares of GM were going for as low as $37 each. Thanks to Durant’s raid and WW1, the stock got as high as $558 by 1915.

In his battle to regain control, Durant used DuPont as an ally. This tactic was to become common in the 1980s. The problem was that by 1920, DuPont had control.

Still, it’s a great story. Check out this NYT story from December 1915 when Durant finally gained control of GM.

Posted by on November 17th, 2010 at 11:38 am


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