GM IPO may be hard sell

Dayton Business Journal ^ | 8/19/2010 | Editor

[Qbert]

Investment advisers say the highly-anticipated General Motors Co. IPO may not have investors breaking down the doors.

Tom Mangan, senior vice president and portfolio manager with Beavercreek-based James Investment Research Inc., said GM’s initial public offering will be a hard sell, with many institutional investors wary of a company that is run by the government.

“Former shareholders and bondholders will most likely be reluctant to jump back into the stock, especially given the disingenuous commercial by CEO (Ed) Whiteacre where he said GM paid back its government loan in full,” Mangan said.

In addition, Mangan said brokers will not be highly incentivized because the underwriting concession and sales allowance for selling the shares is extremely low compared to other IPOs.

[The Great RJ]

Perhaps if they gave away a new Chevy Volt with the purchase of every 100 shares it might spur stock sales and the production of these white elephants. (sarcasm)

[Rapscallion]

Ask George Soros to invest heavily.

[Pilated]

Never in my life time (and I have many years left to live) will I ever buy, use, contribute to any GM product, even after BO is long out of office.

[Pollster1]

This is a bad investment, whether at an absurd and ruinous $50 a share, or $10 a share, or $1 a share, or even a less shocking but still overpriced $0.01 a share, or 100 shares for a penny. Profiting off of the nationalized version of GM would be immoral when they are keeping $30B plus in taxpayer money and the bondholders were ripped off by executive fiat and in violation of written contracts, bankruptcy law, and generations of common law, but there won’t be any profits for those stupid enough to invest to worry about. I am boycotting GM as an investment, and I am boycotting their products forever. I expect the vast majority of real Americans to do the same.

[dynamitehack]

Unfortunately, we (taxpayers) are likely going to be the biggest purchasers of this stock, they can’t let the IPO fail.

I thought the whole reason for selling these shares was to reduce the public ownership of GM...

'hack

[cynwoody]

with many institutional investors wary of a company that is run by the government.

Um, shouldn't that be investors not needing to be institutionalized?

[Cheetahcat]

“Unfortunately, we (taxpayers) are likely going to be the biggest purchasers of this stock, they can’t let the IPO fail.”

IPO cross that out and substitute union.

[Cheetahcat]

“Banks and investment firms who have their soul owned by Obama, will be brought into the oval office and given their directions.”

You are right and the gauge of this will be how much Soros invests in it!

[zeugma]

isn’t this where the stock holders got screwed during the bailoug and the unions got rewarded?

Somewhat. The stockholders didn't exactly get screwed. As stockholders, if the company fails, they should lose their equity. That's the way the free market is supposed to work.  Unfortunately, the government stepped in and decided that since they have guns and are willing to use them, that the law means nothing. They stole the existing equity of the bondholders and gave that to the union thugs (and others).

The rule of law means nothing to this government. The way the bondholders were screwed was a lot bigger deal than most people realize.

[Qbert]

“Profiting off of the nationalized version of GM would be immoral when they are keeping $30B plus in taxpayer money and the bondholders were ripped off by executive fiat and in violation of written contracts, bankruptcy law, and generations of common law, but there won’t be any profits for those stupid enough to invest to worry about.”

Good point. This whole charade just feels “icky”. GM recently admitted in their IPO filing that their internal controls over financial reporting are materially weak as of a month ago- and yet they’re rushing this IPO before the elections to try to make Obama look like a savior, after all the corrupt things they did early on in wiping out the bondholders. It feels more like something they would do in the Soviet Union.

btw, I thought I saw somewhere somebody saying that the price of the shares would initially be around 140 dollars a share (!), but I could be wrong...