Ally Financial Inc. held the largest IPO of the year this week, but its shares fell in their trading debut Thursday.
The Detroit-based auto lender is the former financing arm of General Motors. It was nearly wrecked years ago by bad subprime mortgages through its Residential Capital unit and received a $17.2 billion bailout by the U.S. government during the financial crisis.
Ally has since cut ties to ResCap and transformed itself into a company focused on U.S. auto lending and banking.
Its offering of 95 million shares priced at $25 each raised $2.38 billion. That's the largest initial public offering thus far in 2014, which has proven a busy year for IPOs. The next closest would be auto loan financing company Santander Consumer USA's offering in January, which raised $1.8 billion and IMS Health Holdings Inc.'s offering earlier this month, which raised $1.3 billion.
Ally's shares priced at the low end of its expected $25 to $28 range. Its shares fell 83 cents — a 3.3 percent drop — to $24.17 by midday, worse than the broader market decline.
The money from Ally's offering goes to the federal government, which sold most of its stake in Ally through the IPO. With this sale, the government's ownership of Ally's common stock will drop from 37 percent to about 17 percent. It also brings the amount it has recouped from the bailout of Ally to $17.7 billion, slightly more than the $17.2 billion it put up in the bailout.