Report: Ford will serve as bellwether for GM stock value

Article by Christian A., on November 1, 2010

General Motors Co. has got to be envious of Ford Motor Co., which has taken its place as Detroit’s darling. But as GM prepares its initial public offering, Ford’s rising shares could actually benefit GM.

As Ford is GM's only major US-listed competitor, company investors and bankers are turning to Ford as they attempt to determine the GM’s theoretical value ahead of the high stakes IPO. The value of GM could be calculated several ways.

One method is to use a multiple of its projected cash flow based on Ford's multiples. Another way is to do an implied value calculation based on where GM bonds are trading.

Initial expectations have been for GM's IPO to weigh on Ford's shares, which have risen sharply since achieving a record $1.02 low in November 2008 and were trading around $12 when reports of GM's stock float first came out last May.

Ford executives were asked constantly to evaluate the risk that mutual funds and other institutional shareholders might "rebalance" their portfolios, dumping Ford stock and purchasing GM. [via autonews - sub. required]

Topics: ford, gm, shares

If you liked the article, share on:

Comments

Recommended

Kia is taking things a step further with the new Kia Stinger, which they first introduced at the 2017 Detroit Auto Show. With the specs given to us by the...
by - June 25, 2017
Earlier this week, Nissan revealed a teaser of the new 2018 LEAF’s interior, giving us an idea of what the electric vehicle has to offer. The company released a video...
by - June 25, 2017
The primary suggestion of a 4x4 ute from French company Peugeot was first revealed in 2016. Fifteen months later, the production version is launched. Now, Peugeot is not shying away...
by - June 24, 2017
The new Jaguar E-Pace crossover will soon hold its official launch on July 13 and is expected to arrive at the showrooms by early next year. It couldn’t have come...
by - June 24, 2017
As prices of the original Shelby Cobra have skyrocketed into astronomical proportions, there are firms like Superformance that serve replicas to consumers who demand the same levels of performance at...
by - June 24, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries