After early slide, GM shares stay on the road

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Shares of General Motors Co. almost went into reverse Friday but a burst of well-timed buying prevented the stock from skidding below the price of its initial public offering.

A day after its ballyhooed IPO, the stock fell sharply in the first 30 minutes of trading alongside much of the rest of the equity market.

GM shares dipped to $33.11, just above the company’s $33 IPO price. Falling below that level, especially so soon after an offering, would be a black mark on the stock’s image.

But buying quickly materialized and the shares powered higher to end the day up seven cents at $34.26.

The rebound simply could have been due to the general recovery in the market. The Dow Jones industrial average closed up 22.32 points, or 0.2%, to 11,203.55.

But could the big investment banks that underwrote the GM deal have given the shares a bit of help?

The banks have a stake in seeing the shares maintain their IPO level: Neither the investors who bought into the deal nor the federal government, which still holds a huge stake in GM, would be happy to see a breach of the offering price immediately after the IPO.

Whatever the case, GM shares remain in gear.

-- Walter Hamilton