When General Motors Co. sells stock to the public, it will be priced from $20 to $25 per share, Chairman Ed Whitacre predicted Wednesday.
Whitacre told reporters at an event in San Antonio, Texas, that the automaker's initial public offering would take place sometime in November.
"It's going to be somewhere in the $20 range, $20, $25, something like that," Whitacre said, according to WOAI-TV and the San Antonio Express-News.
GM had not previously announced a date or price for the IPO, although it had been tentatively set for next month. The automaker is waiting for U.S. regulators to sign off on its proposed plan to sell shares.
Whitacre, who stepped down as GM's CEO Sept. 1 but remains chairman, said it was too early to give an exact price for the stock's debut. He said that the IPO would be successful because GM is making a profit and has great cars and trucks.
GM became a private company last year after filing for bankruptcy protection. The U.S. government became the largest shareholder when it gave the company $50 billion to help it survive. The government hopes to recoup that investment by selling its 61 percent stake over time. That stake amounts to just over 300 million shares of GM stock.
It's unclear just how many of those shares the government will offer in the initial stock sale. Whitacre's replacement as CEO, Dan Akerson, has said it will take many sales over a couple of years for the government to fully unload its stake.
The government hopes to sell a small number of shares at first, then more in follow-up sales. The success of those sales depends on whether GM's financial situation keeps improving and its stock price rises.
GM's other shareholders, the Canadian and Ontario governments, a union health care trust fund and former GM bondholders, also are expected to sell some of their stakes.
Many investors had been waiting for GM to announce the share price, which traditionally is done in a filing with the U.S. Securities and Exchange Commission. GM had previously refused comment on the IPO price, saying that it was in a legal "quiet period" before the sale.
Neither the SEC nor GM would comment on Whitacre's statements, which one IPO analyst called a trial balloon to see how investors would react to the price.
GM has an estimated 550 million shares outstanding, and they have been valued by a government bailout watchdog at around $133.78 per share. The company would have to issue more shares before the IPO to bring the price down to the $20 to $25 range. The move, called a split, would give shareholders around five to seven new shares for every share they now own.
SEC rules do not stop executives from talking about share prices, but Whitacre's remarks were ill-advised, said Peter Henning, a law professor at Wayne State University in Detroit who worked as an attorney in the SEC's enforcement division.
Market conditions could change and GM could announce a lower starting price, which would be seen by investors as a sign of weak demand, Henning said.
"It's probably not a good idea to speculate when you're in the quiet period," he said. "It's probably not something that would ever draw any kind of enforcement action or even an investigation. I think it was probably just an off-the-cuff remark."
Scott Sweet, managing partner of IPO Boutique, a stock offering research firm, said Whitacre's statement could alienate some investors who wanted to pay a lower price. Some investors, he said, are comparing GM's share price to Ford Motor Co., which has made more money than GM this year and is further along in its turnaround plans. Ford shares closed Wednesday at $13.64.
"Someone should have muzzled him on that statement," Sweet said. "The price range may have been put out as a trial balloon to see who laughs, who cries, or who says 'Great, it's cheap.'"
Once GM gets the OK from the SEC to proceed with the sale, it will go on a two-week worldwide "road show" to offer the stock to big investors such as mutual, hedge and pension funds. The U.S. Treasury Department has said that individual investors will also get a chance to buy GM shares.
GM will set a price range before the road show, and it will reveal the final sale price on the day before the sale.
The automaker will not sell any common stock itself, but will sell preferred shares to raise money to pay down debts and fund pension plans. Preferred shares behave like bonds because they offer a set dividend. GM's preferred shares will be converted to common stock in 2013.
The automaker made $2.2 billion in the first half of the year, and should post its third-straight quarterly profit in early November.
GM repaid the Treasury Department $6.7 billion earlier this year, and the government hopes it can get back the remaining $43 billion in the stock sale.
AP Business Writers Marcy Gordon in Washington and Dan Strumpf in New York contributed to this report.