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No one can deny that it has been an incredibly bumpy ride for General Motors over the last few years. After all, less than a year and a half ago, the once formidable American auto maker was in the midst of bankruptcy reorganization, having received a mountain of federal bailout money. Yet, today, ironically, the company is launching one of the most highly anticipated, and likely the largest, initial public offering in history.

Originally, the GM IPO was on track to sell about 365 million common shares, each priced in the range of $26-$29, with another $3 billion being raised in the preferred stock offering. However, as the date of the stock’s return to Wall Street neared, the popularity of this issue continued to swell. And now, just hours from its arrival, the booming investor demand has reshaped the IPO into a record event.

Indeed, the amount of common stock to be offered has been increased over 30%, to 478 million shares. The per-share value has also been lifted to $33. GM will additionally now sell $4.6 billion in the preferred stock offering. Taking into account the mandatory convertible preferred shares included, the IPO may well raise a touch under $23 billion, which would surpass the Agriculture Bank of China’s earlier $22.1 billion record.

For Washington, this represents a giant step toward recouping the $50 billion it had shelled out to General Motors during the bailout process. Already, the car maker has paid back slightly less than $10 billion, but the IPO will significantly reduce the federal government’s stake in the Detroit company.

In all, the U.S. Government will sell 412 million of the 912 million shares it owns in the company, which will trim its position from 61% to just under one-third. The union healthcare trust fund will also part with 102 million shares and the Canadian government will throw 35 million shares into the pot. (These totals assume the overallotment option is exercised, which, given the soaring demand, seems destined to occur.)

The goal here, from the U.S. Treasury’s standpoint, is maximizing value from the get-go. In turn, the higher per-share price certainly helps reduce the outstanding bailout balance. However, the talk over whether this may slow the stock’s initial performance following the IPO has grown.

It seems, for now, that the investor interest is there, and we would not be surprised to see a 10%-plus price increase following the offering.

That being said, there seem to be limits as to which investors will benefit from the “hot” IPO. In fact, given the elevated demand for a piece of GM’s return, funds and institutional investors will likely be the ones scooping up the bulk of the initial offering. There are a plethora of banks involved in the underwriting, including big boys like JPMorgan Chase (JPMFree JPMorgan Chase Stock Report), Goldman Sachs (GS), and Morgan Stanley (MS). And, at this point, it remains to be seen what kind of access the individual investor will have. Certain brokerages and online traders, such as Charles Schwab (SCHW) and E*Trade Financial (ETFC), have already indicated that they will not be partaking in the IPO, as the shares were not available.

The irony here, obviously, is that it was the taxpayer who funded GM through its collapse and recovery. The offering is a vital start, but now it will likely take a strong run for these shares before the bailout balance slate is wiped clean.

Meantime, China’s state-run SAIC Motor Corporation is also looking to be included here, as part of its ongoing discussions with GM regarding expanding the pair’s joint venture beyond the world’s most populous nation. The Chinese government is still reviewing the SAIC proposal of a $500 million-$1 billion investment as part of the IPO. Other overseas purchasers have also expressed interest, and the car maker had earlier announced it was willing to sell over $1 billion shares to sovereign wealth funds located overseas.

The question now lies in what can we expect from GM shares beyond the initial public offering.

After all, this is a stock that was trading at $95 only a few years prior to its collapse. And through its bankruptcy reorganization, General Motors was able to restructure and reduce its crippling labor costs, while shedding the bulk of the debilitating debt, the combination of which can primarily be to blame for the company’s pre-reorganization demise.

As a result, GM seems to have a little more breathing room than even its Detroit rival Ford Motor (F). Indeed, the latter was able to avoid Washington’s handouts, as it secured necessary debt prior to the credit crunch. However, its balance sheet is now much more leveraged than its post-bankruptcy counterpart.

Meantime, U.S. sales are improving, though they remain well below the peak levels of a few years ago. Still, General Motors is back in the black, recording a profit of over $4 billion through the first three quarters of 2010. To give you an idea of how impressive a tally that is, you have to go back to 2000 for the last time the company’s net income topped the $4 billion mark for the full year. And investors likely haven’t forgotten the fact that GM still manufactures nearly 12% of all new vehicles sold on this planet and around 18% of those in the U.S.

All things considered, these shares are probably going to remain popular in the near term and trade largely on the buzz, given that GM’s is likely one of the most high-profile IPOs of all time.

Heading into 2011, however, this stock is probably geared mainly as an economics play. Indeed, once the initial excitement wears off, investors are going to want to see results. Thus, if the economic recovery sustains momentum, car sales should improve. Currently, sales in the U.S. seem capable of approaching the 13 million mark in 2011, up from the mid-11 million range we anticipate this year.

That said, the same challenges that GM faced prior to its fall are still in its path. Primarily, building cars people want to drive, while sustaining the capital position and cost structure it took a bankruptcy and $50 billion in federal bailout funds to repair.

These shares may well get on track to return to the heyday levels of the old GM stock. However, it will take a new General Motors to get them there.

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.