GM Ditching NYSE for Nasdaq in Bid to Close Valuation Gap
GM sits 28% above its 52-week low of $66.75.
Summary
GM is moving its listing from the NYSE to the Nasdaq effective Nov. 17, a bet that a tech-heavy index will pull its five-times-forward-earnings multiple closer to software peers. The market liked it: shares jumped 5.5% Tuesday, the biggest move since Jan. 27, and added 2.4% Wednesday. The pitch rests on two digital units, OnStar and Super Cruise, which carry roughly 70% gross margins and ended Q3 with $6.8 billion of deferred revenue, up 40% year over year. The bigger prize is index inclusion — Barclays' Dan Levy calls GM a prime candidate for the Nasdaq-100 reconstitution announced Dec. 11, which would force passive funds to buy. Context matters: the $20 billion buyback unveiled with Q3 results on Oct. 20, equal to roughly 30% of market cap, did not stop shares falling 7% on cost and pricing worries, so management is now trying structural fixes. Watch the Dec. 11 index announcement as the next concrete checkpoint.
At the time of this announcement, GM was trading at $85.40 on NYSE in the Energy & Transportation sector, with a market capitalization of approximately $72.3B. The 52-week trading range was $66.75 to $91.85. This news item was assessed with positive market sentiment and an importance score of 7 out of 10. Source: CNBC TV18.