GM's stock dipped as low as $33.11 early Friday, more than 3 percent below Thursday's closing price, before climbing back to $33.95 at midday.
Investors and the U.S. government are watching how the market views GM. The company's stock went public Thursday amid an impressive turnaround 16 months after exiting bankruptcy protection.
The second-day stock dip isn't surprising, although a drop below the IPO price could spell trouble because it would trigger computerized "stop loss" orders to sell millions of shares, said Scott Sweet, senior managing partner of the research firm IPO Boutique. He expects volatility for three or four days before the shares stabilize.
The stock jumped as high as $35.99 in its market debut before pulling back later on Thursday. Almost 457 million GM shares traded, about one tenth of all trading on the New York Stock Exchange. GM closed up 3.6 percent at $34.19.
The government is on its way to getting back at least part of the $50 billion it spent bailing out GM, which left bankruptcy protection last year with a balance sheet cleansed of its huge debt.
The government and GM's other owners sold 478 million common shares in the IPO for $33 each, bringing in $15.8 billion.
The government made $11.8 billion in the IPO by selling 358 million shares, reducing its ownership stake about 36 percent from 61 percent. It stands to make $13.6 billion - and lower its stake to 33 percent - if bankers exercise options for 54 million more shares. If the options are taken, the government will have 500 million shares left, and they must sell for $53 each in order to get all the bailout money back.
The bankers have 30 days to exercise their options, and if they do, it would add 72 million shares to the number now on the market, bringing the total to 550 million.
Sweet doesn't think uncertainty over the options is weighing on GM's stock price because investors know that banks are likely to buy and resell the additional shares.
Banks may be buying shares on the open market to keep the stock price from falling below $33, said Matt Therian, a research analyst for Renaissance Capital, which tracks IPOs.
A leaner GM earned $4.2 billion in the first nine months of this year, and its chief financial officer said it could post huge pretax profits if the U.S. auto market recovers to pre-recession highs.