GM hopes for rebirth with public offering
DETROIT – The last time General Motors threw a big party was two years ago, for its 100th birthday. Two months later, its CEO was before Congress, begging for bailout money. Now GM is getting ready for another celebration – this time for its future.
GM will be reborn as a public company today with a stock offering, ending the government’s role as majority shareholder and closing a remarkable chapter in American corporate history.
The U.S. government should make about $13.6 billion when GM shares start trading on the New York Stock Exchange. The federal Treasury is unloading more than 400 million shares of GM, reducing its stake in the company from 61 percent to about 33 percent.
The IPO could wind up as the largest in history. GM set a price of $33 per common share on Wednesday, a day after it raised the number of shares it will offer to satisfy investor demand. When the U.S. government and other owners sell their shares, they’ll raise $18.2 billion. GM will raise another $5 billion by selling 100 million preferred shares at $50 each.
Together, the sale of common and preferred stock will bring the deal’s value to a record $23.2 billion.
Housing construction’s drop sharpest in West
WASHINGTON – Construction of new homes fell in October, fresh evidence that the housing industry remains under duress.
Construction of new homes and apartments sank 11.7 percent last month to a seasonally adjusted annual rate of 519,000 units, the Commerce Department said Wednesday.
The overall drop marked the poorest showing since April 2009, when construction dropped to 477,000 units.
Analysts said construction activity is likely to remain depressed for years to come.
Housing construction fell the most last month in the West, where it dropped 30.5 percent. Construction fell 13.4 percent in the South. It rose 12.9 percent in the Northeast and 1 percent in the Midwest.
Separately, the Labor Department said inflation was essentially tame last month. A steep rise in gasoline prices drove the consumer price index up 0.2 percent in October, the fourth straight monthly increase. But excluding volatile food and energy costs, core consumer prices were unchanged for the third straight month.
Pair say Huffington Post based on stolen ideas
NEW YORK – Two Democratic political consultants say the Huffington Post’s founders stole their blueprint for the popular news-and-views website, and they’re suing to get what they say is their rightful credit – and money.
Peter Daou and James Boyce say they came up with the site’s signature blend of blogs by prominent people, news aggregation, original reporting and online community-building, originally envisioned as a liberal counterpoint to such conservative-tilting sites as the Drudge Report.
The Huffington Post and a lawyer for the site didn’t immediately respond to e-mails Wednesday evening, but Politico says co-founders Arianna Huffington and Kenneth Lerer called the claims “pure fantasy.”
Daou and Boyce say they repeatedly discussed their plan in detail with Huffington and Lerer in 2004.
Huffington and Lerer used their ideas to raise millions of dollars and develop the site but cut the consultants out before it was launched in May 2005, according to the lawsuit, filed Monday in a Manhattan state court.