NEW YORK -- For General Motors, yesterday wound up the sales pitch of a lifetime. Its short video presentation, which it displayed around the country, was a smooth one. Fresh-faced adolescents and bare-bottomed babies grinned from the seats of GM cars. Happy customers breezed by in their Cadillacs and Chevrolets.
But this time the world's largest automaker was not selling cars and trucks, it was selling itself, in the form of the largest stock offering by a U.S. company.
Later this week, GM plans to sell up to 57.5 million new shares of its common stock to raise $2.29 billion. The money will dress up GM's battered balance sheet and pay for everything from new-car development to new tools and equipment.
The only other U.S. institution to attempt such a sizable stock sale was Conrail, the freight railroad, which raised $1.46 billion by selling stock in 1987.
"There hasn't been anything this important in a long time," said Robert H. Stovall, chairman of Stovall/Twenty-First Advisers, a money management firm, and a longtime GM watcher. "This could set all kinds of records in terms of numbers of individual investors buying. It's a major event in the distribution of stock."
It is also the monster that dominates Wall Street. Almost every brokerage house in the country is trying to sell part of the offering, partly because the market is ripe for a stock sale of an icon of corporate America. But more significant are the fees.
Compared with the mega-fees booked from mergers in the 1980s, the GM underwriting fees may look modest. But if the sale is a complete success -- nearly everyone predicts it will be -- Wall Street's estimated cut will be anywhere from $69 million to $115 million.
Offerings like this have fatter profit margins for brokers, providing a big incentive to sell the new shares. And best of all for investors, GM effectively pays the sales commission -- not the customer.
Since it announced its stock offering late last month, three teams of executives have hopscotched around the world to 17 cities, meeting with investment managers to pitch the stock and GM's plan to nurse itself back to health after a record $4.5 billion loss last year.
In fact, two of GM's private airplanes have been in constant use to help transport the management team of 10, and their Morgan Stanley & Co. investment bankers, from London to Hong Kong to Minneapolis to New York. Translators have rattled off the minutiae of earnings per share and car-platform renovations in Japanese and French.
More than 500 institutional salespeople at Morgan Stanley, which is leading the stock-sale effort, have called up investors around the world to pull a crowd to the road-show sessions, which ended yesterday with stops in Baltimore and Philadelphia.
In the end, though, the well-laid plans could be undone by the market's unpredictable cruelty.
"It would screw them up if the market tanked from here," said Michael Murphy, editor of the Overpriced Stock Service, an investment newsletter. "They could still get the deal done, but odds are they wouldn't want to."
So far, the stock market has been awaiting GM with open arms. The more cynical of analysts say they wish the automaker could run its businesses as brilliantly as it has timed its stock offering, which stands to capitalize on the current market euphoria.