>> tom: could 33 be general motors' lucky number? the automaker prices its stock at $33 a share. >> susie: g.m. is on track to make history, with the largest- ever i.p.o. in the u.s. but, is the price right? we'll do the math with an expert. you're watching "nightly business report" for wednesday, november 17. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:

this program is made possible by contributions to your pbs station from viewers like you. captioning sponsored by wpbt >> susie: good evening everyone. a "new" stock will trade here at the new york stock exchange

tomorrow: general motors. tom, everyone's talking about g.m. going public just a year after emerging from bankruptcy. >> tom: susie, the automaker priced its shares late this afternoon. $33 dollars each, higher than originally planned. g.m. will raise about $23 billion, combining common and preferred shares, making it the largest i.p.o. in u.s. history. and it'll trade under the ticker g-m, same as the old symbol. >> susie: but the company is "new." leaner-- only four brand names remain, cadillac, buick, chevy and g.m.c. downsized-- 25% fewer workers. new management-- dan akerson is the c.e.o., the fourth in two years. it's profitable-- $5 billion dollars so far this year, and expected to report its first full-year profit since 2004. >> susie: does it make sense to buy g.m. stock? joining us now, anant sundaram,

professor of finance at dartmouth university's amos tuck school of business. anant, nice to have you back on the program. >> thank you for having me. great to be back. >> susie: now, you have studied i.p.o. valuations for years. when you look at $33 a share for the g.m. stock, is that high, low, or just right? >> from the investor's standpoint, it is probably a little on the low side despite the fact that g.m. upped the price from $29 in the preliminary filing. so for the investors, we will know the answer to this tomorrow morning. it could end up being rather nice offering. >> susie: now, the last time you were on our program, which was a little more than a year ago, you were kind of pessimistic on the outlook for general motors. how about now? >> oh, i think it is fair to say that this has been one of the most remarkable

corporate turnarounds in history, certainly that i know of. and no hodge-podge thanks to the u.s. government helping to wipe out 90 million in debt and liabilities, but the company has executed its strategies superbly, compared to year, year and a half ago, when debt was staring them in the face. the possibility seems very remorse that the u.s. taxpayers would get it back. and now it seems much closer to reality. they have to be congratulated on that. >> susie: what is it in for american taxpayers. as everyone remembers, they gave $50 billion to g.m. as bailout money. how high does g.m.'s stock have to get in order for american taxpayers to make money or at least to break even? >> that's an excellent question. given that its price is about $33, i would venture a guess that with the remaining shares that the

government owns, if they were to get it out into the market, it would have to be priced in the low-to-mid-50s for the u.s. taxpayers to break even. i think g.m. may have had an opportunity here to up the price perhaps a little more relative to the level they settled on, which is $33 now. they could probably have gone a little higher. they seem to have upped the volume by 30%, relative to the preliminary offering, but the price only by 14% or so. so, again, there could be a nice runup -- i'm predicting, of course. and predictions are always fraught with peril, but one could see a nice run-up in the end of the first trading day tomorrow. >> susie: do you want to make a guess at when you think it is going to close tomorrow at this time? >> that's, again, a very tough question to answer. i can rely on past evidence from research that basically shows that stocks that have had their issues -- or issues, i should say that have had

their issue prices upwards from the preliminary offering generally tend to have a much higher so-called first-day pop, or the price increase relative to the issue price compared to the normal issue. so in the u.s., a typical issue thas gone up 16% on ayer rage on the first day of trading. g.m., who's prices have been revised upwards, tend to go up more like 30%. of course, that is on average, so every case could be a little different. >> susie: it could get up to $40, sounds like what you're saying? >> if it did that, i would not be surprised at all. >> susie: all right. we're going to have to leave it there. anant, thank you so much for coming on the program. >> thank you very much. >> susie: and we've been speaking with anant sundaram, from ammos tuck school of business. tomorrow, we'll have complete coverage of g.m.'s i.p.o.,

including what speed bumps lie ahead for potential investors. >> tom: here are the stories in tonight's n.b.r. newswheel: stocks end the day pretty much unchanged, despite a mid-day rally. the dow closed up 15 points, the nasdaq gained six, the s&p 500 up a fraction. volume on the big board just over 950 million shares. nasdaq? 1.83 billion. both down a bit from yesterday. consumer inflation remains very low. excluding food and energy, prices were flat last month, for the third straight month. core prices rose 0.6%, the smallest increase since 1957. more weakness in housing, new home construction fell nearly 12% last month. there was a small drop in building single-family homes, a huge drop in apartments and multi-family units. and more ideas on cutting the nation's budget deficit: a national sales tax, a payroll tax holiday and a tax on soft drinks.

some economists and budget experts say those might work. the panel's led by former fed vice chair alice rivlin and former senator pete domenici. but unlike the suggestions last week from the president's deficit commission, this group would not raise the retirement age for social security. still ahead, this woman thought buying a condo would be her key to easy living. but, the harsh realities of unexpected expenses really hit home. meet her in tonight's "money profile." >> susie: it is now official. john boehner will be the nation's 61st speaker of the house. boehner's republican colleagues voted to give him the top job today-- boehner's 61st birthday. the next speaker is a pragmatist who has strong support from business. but as darren gersh reports, boehner's most important work may take place behind the scenes. >> reporter: almost four years ago, it was john boehner's job to give the speaker's gavel to nancy pelosi. in a few months, he will get it

back. when he does, political economist andy laperriere expects the new speaker to make his mark as a consensus builder. >> you're going to have tea party republicans who are going to want to take an aggressive posture, they're going to want to do things that are controversial. then you're going to have other republicans who aren't going to want to go that far. i think it's going to be difficult for anybody to manage the internal dynamics of the republican caucus, and i think boehner is pretty well suited to do that. and without that kind of management ability, you could have a civil war among house republicans over the next two years. >> reporter: boehner's views on business are considered mainstream republican, which is reflected in his broad base of donors. insurance companies, wall street bankers and real estate developers have all given generously. in the last two years, the speaker-to-be's campaign took in over $8 million. on top of that, boehner formed what's called a leadership political action committee that raised another $3 million for fellow republicans.

and opensecrets.org editor david levinthal says boehner's support profile is quite different than soon-to-be minority leader nancy pelosi's. >> you don't see a whole lot of unions on his list. you don't see a lot of democratic or liberal-leaning groups. he is a very traditional mainstream conservative and the support he has received is largely coming from businesses. >> reporter: the first key test of the new speaker will come early next year and on a high profile economic issue: the debt limit. many republican members of congress have already vowed to vote against an increase. >> they are already thinking about how they are going to build a majority for raising the debt limit, but it's going to be a big challenge for boehner. >> reporter: boehner will also have to manage relations with the white house. one of the few areas of cooperation expected there? trade policy. darren gersh, "nightly business report," washington.

>> tom: the major stock indices could not hold onto their earlier gains late this afternoon. let's take a look at tonight's "market focus." the market tried to rebound after yesterday's rout, but it just wasn't to be. today's chart of the s&p 500 shows us the story. stocks were in positive territory for much of the day, but as you can clearly see, those gains eroded in the last hour of trading. helping the market limit its losses were retail stocks, including target. earnings at the nation's second biggest retailer came in as expected. target's credit card business continued to improve.

the company also expects holiday same-store sales to be the best they've been in three years. all that optimism saw the stock pop almost 4%. and volume was strong on this rally, which has target shares breaking out to their highest price since may. kohl's jumped more than 4%, now back to where it was trading before last week's earnings. coach gained 3%. now less than $1 away from a 52- week high. and teen retailer abercrombie & fitch added 3%. its latest quarter beat the street. one more retailer, b.j. wholesale. this 3% rally today, shares are at their highest price since 2002. earnings were stronger than expected and it's raised its outlook. financial stocks were the weakest today as the federal reserve released guidelines if the biggest banks want to increase dividends or launch stock buybacks. these rules apply to the 19 banks that were subject to the fed's stress tests last year.

here are some guidelines. they will have to show they have the capital to absorb loan losses over the next two years, including under adverse economic conditions. banks also have to show how they will meet new global bank capital requirements and pay back the government before raising dividends or making any buybacks. the major bank exchange traded fund sank more than 1.5%, but volume was low. this is a two-week low. the biggest drag on the s&p 500 came from an industry that has been the focus of lots of interest: data storage. net-app had been among those rallying until this latest market weakness. but a disappointing outlook today hit shares for 6%. take a look at profits in the last quarter. they were better than estimates with revenues up 33% from last year. these results are even stronger than what the company forecast in august. still, the stock dropped more than 6% thanks to a disappointing profit prediction for the current quarter. this is the first time in a month net-app has traded below $50 a share.

two mergers to tell you about. one in metals, the other in electronic payments. two very different industries. metal products maker ladish has agreed to be bought by steel maker allegheny technologies. it is a $778 million dollar deal, valuing ladish at $46.75 per share, sending ladish stock soaring. a deal about half that size for electronic payment company hypercom. verifone is buying its competitor, valuing it at $7.32 per share, sending hypercom stock to a four-year high. and that's tonight's "market focus."

there's plenty of anticipation about the g.m. stock sale tomorrow, but some of the best- performing initial public offerings this year are china- based companies listing their stocks in america. since they hit the street, solar products company jinko solar, information technology firm hi- soft and business software maker camelot information systems are among the top performers of i.p.o.s in the u.s. tonight's "street critique" looks at chinese i.p.o.s. jeffrey papp is a senior analyst at oberweis asset management, where he helps manage its china opportunities mutual fund. jeff joins us form the c.m.e. group in chicago. >> tom: jeff, welcome to "nightly business report." so why the american appetite for the chinese i.p.o. s this year? >> i think everyone has appreciated the chinese growth story, and they're seeing these companies come list here in the states, where we have no growth, and they're

snatching them up. >> tom: are these new chinese stocks usually brand new companies? do they have much of a track record to assess? >> usually most of the them have a couple year track record to go on. they usually have peers in the group that have listed here before and done extremely well. so a lot of people are looking for companies that can grow from companies they've already owned that have done extremely well. >> tom: that's an online search engine in china. kind of a competitor of google's. speaking of competitors, you have one, language training, it started at 10.50 a share, and now around $9.50. why put new money to work below the i.p.o. price? >> i think it is extremely cheap and extremely unknown. global education provides english training preparation for the l.t. s.test. which is an english

proficiency test that u.s. colleges use for having chinese into the u.s. colleges. if you look at a company like untel education, which is the leading provider of education training in china, this company trades at 40 times global education, and a $200 million market cap. so it is extremely cheap. >> tom: and you like a clothing operator call micox. this started at $11 a share, and now at $14.50. again, is this a play on chinese domestic demand? >> it's a play on two things that are going on right now that are extremely attractive. one, it's increased consumption. catering to 15 to 30-year-old females looking for mass market apparel. they're playing into the huge ecommerce market. it is really starting to gain adoption as people become used to paying on

line. things that we take for granted here, people in china are still getting used to. micox is an interesting way to play that angle. >> tom: of the two stocks we mentioned, does the fund have positions in them? >> both the fund has positions and i own positions in the fund. >> tom: jeffrey papp, senior a >> susie: here's what we're watching for tomorrow: greece unveils the final draft of its 2011 budget. weekly jobless claims come out, and the conference board issues its index of leading indicators for october. also tomorrow, our series "planet forward" looks at the business model behind solar leasing and the challenges facing the industry. >> susie: the oracle of omaha will soon add another award to his prestigious resume: winner of this year's medal of freedom. philanthropist and billionaire warren buffett will be given the highest u.s. civilian honor at a ceremony at the white house early next year.

the honor is meant for people who have made significant contributions to the united states. also being honored along with buffett: former president george herbert walker bush, and german chancellor angela merkel. >> tom: first there was hulu, now there's hulu plus. the online video site has launched a premium streaming service for $8 a month. if you're willing to pay that, you'll get high definition content, which can be streamed onto web devices like ipads and playstations. hulu is still available as a free service, but only on computers. the site is popular. it's on track to generate more than $240 million in revenue this year, mostly from advertising.

>> susie: condominiums are a popular lifestyle choice for many baby boomers, especially those who don't enjoy time- consuming chores like landscaping. but, condo life isn't always easy. owners could face unexpected financial pitfalls. in tonight's "money file," benno schmidt has the story of an embattled condo owner, on a mission to save her community and her investment. >> 18 years ago, peggy stroker bought into buckley towers in north miami beach and became a condominium owner. >> the reason i came to a condo was i like that turnkey aspect. i thought "oh, this is good.

you'll have security." >> reporter: built in the 1960s, buckley towers was one of the nation's first condo buildings. its developer promised buyers "everything you need to live the golden life." the idea was that owner- residents would take care of their own units and pay a pro- rated share of the building's maintenance costs. and stroker never expected those costs to be a major concern. >> i had lived in homes, and i knew how to budget in my homes. >> reporter: but stoker wasn't prepared for what happened after hurricane wilma battered buckley towers five years ago. the aging building sustained major damage. insurance was expected to cover that, but when insurers refused to cover many repairs, condo owners were forced to pay the difference-- through mandatory special assessments. so far, they've amounted to more than $5,600 per unit. stroker-- who is president of the condominium association-- says many owners simply didn't have the money. >> there are special assessments because we are trying to do the

repairs. everybody says "i can't pay anymore. i am getting hit from this, i am getting hit from that..." >> reporter: and the financial hit isn't over. engineer raul schwerdt says the building's deterioration has speeded up. >> mother nature show up every day, every minute. >> reporter: that's led monthly maintenance fees at buckley towers to rise a whopping 45%. meanwhile, the state has declared the building unsafe. faced with rising costs-- and no way to unload their units, due to the crash of the south florida condo market-- many owners simply stopped paying their fees. and now, more than half of the building's units are either in foreclosure or in default. that's left the buckley towers' condominium association $1.4 million in debt. that may be an extreme case, but here in south florida, the collapse of the condo market has meant higher monthly fees for thousands of owners-- even at new buildings like these. that's because when units are unoccupied, there are fewer people to split the building's maintenance tab.

meaning bigger bills for the remaining owners. so is there anything condo owners can do to avoid unexpected special assessments? author and condo expert patrick hohman suggests several preventive steps. the first is to have the condo association find out what repairs are likely to be needed for at least the next 20 years. >> the very best way is to have an engineer make up a priority list of repairs, starting usually with roof repair. that's what keeps water out of the building. because water is what destroys most buildings. >> reporter: then hohman says the condo board should have financial reserves in place to pay for those future repairs. if it doesn't, hohman says you may want to think twice about owning in that building. >> if the financials aren't right, you don't want to get married. you don't want to be there. that's what you have to do to protect yourself. although that advice comes too late for her, peggy stroker is still hopeful. >> this is grassroots and that is why i am committed to

bringing this property back. >> reporter: the bottom line: when you own a condo, you're also a part-owner of the building. and if it has problems, you could end up paying the price. benno schmidt, "nightly business report," miami. >> susie: and finally tonight, an update on a money profile story we brought you over the summer. back in july we introduced you to andy mirowitz. he unexpectedly lost his job in construction management, and in our story, we gave you some ways to prepare for an unplanned retirement. well, andy's not retired anymore. he's been hired by a south florida construction company to handle business development, and he's happy to be back on the job. and tom, andy says thanks to the planning he did beforehand, he and his family did not suffer financially while he was looking for work. nice happy ending. >> tom: that's "nightly business report" for wednesday, november 17. i'm tom hudson. good night everyone, and good night to you too, susie.

>> susie: good night tom. i'm susie gharib. good night everyone. we hope to see all of you again tomorrow night. "nightly business report" is made possible by: this program was made possible by contributions to your pbs station from viewers like you.

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