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General Motors has plans to develop more price versions of its large SUVs and Silverado pickup.
Shares of automotive manufacturer General Motors (NYSE: GM) closed lower than its initial public offering (IPO) price for the first time in nearly two years. On the 13th of June, the company closed at $32.28 per share, a loss of 7.8%. Meanwhile, the last time General Motors closed lower than $33- its IPO price- was in October 2020. Other automobile companies are also shedding gains and recording lows. Ford Motor Company (NYSE: F) and Stellantis (NYSE: STLA) have declined significantly over the past year. As the broad market sell-off continues, General Motors has also lost almost 55% since January.
The year-to-date decline and the per-share rate below its IPO price have sent fears to investors who ask if General Motors is past its good days. There is also the fear of recession as US gasoline prices hit record highs. Last week, the federal government announced that nominal pump prices hit an average of over $5 per gallon for the first time in history. Automakers are plunging after recovering record profits during the pandemic. Demand at the time exceeded the investors of newly manufactured vehicles as a result of supply chain challenges. Also, there was a shortage of semiconductor chips which impacted automobile manufacturers. The problems led to significant increases in the prices of new vehicles. Even as there were lower sales, car makers recorded remarkable profits.
General Motors Drops Below IPO Price of 2010
General Motors saw its lowest price per share since its IPO in November 2010, shortly after the company’s annual shareholder meeting on Monday. During the conference, General Motors CEO, Mary Barra, said the company is selling every truck it can build. She added that the manufacturing company plans to expand its North America truck-building capacity. Majorly, General Motors intends to invest in EVs for North America, China, and other markets. Additionally, the company plans to fund the investments by maximizing profits from its North American combustion truck and large SUV models.
According to Barra, General Motors has plans to develop more price versions of its large SUVs and Silverado pickup. Even as it currently trades below its IPO price at $32.90 per share, General Motors wants to up production this year. The company expects to expand its production by 25-30%. Replying to a shareholder who asked about restoring the dividend, Barra said General Motors has a “clear priority” to “accelerate” its EV plans.
In addition to losing nearly 45% since the year started, General Motors stock has lost more than 46% over the past year. Also, the company has dropped almost 21% in the last three months and nearly 13% over the past month. In the last five days, GM has shed 14.67%.