Skip to comments.Some Average Investors May Be Shut Out of GM's IPO
Posted on 11/12/2010 11:13:38 AM PST by Qbert
Just two years after a taxpayer bailout salvaged General Motors, some of the nation's largest retail brokerage firms are apparently being shut out of what is poised to be a lucrative investment opportunity as the auto company goes public.
Charles Schwab (NYSE:SCHW - News), TD Ameritrade, and E*Trade are not accepting client orders for GM shares at the moment because they do not expect to receive stock allocations when the company goes public next week, according to investors and brokerage-firm employees.
Other big retail brokerages, such as Morgan Stanley (NYSE:MS - News), are expected to get shares, however, as are big institutional investors and hedge funds.
The lack of available shares is a disappointment to some potential retail investors, who are frustrated that, after federal TARP funds helped a struggling GM in the depths of the financial recession, they may not be able to participate in what is expected to be a good money-making opportunity.
"I really like the GM IPO, I think it's going to do well," says Anand Marphatia, a 51-year old father of two who in Houston who lost his job in the recession and now invests using a Schwab account. He says his requests to Schwab for GM shares have been rebuffed: "I'd like to get in, and I can't."
GM's IPO shares are widely expected to price at a level above the $26 to $29 range that has been listed in the company's offering documents, and many investors expect even a higher share price to trade up in the aftermarket. Mutual funds, hedge funds, and some sovereign-wealth funds are expected to receive the bulk of the shares on offer next week. But some acknowledge that they are unlikely to get stock allocations as large as they would like.
(Excerpt) Read more at finance.yahoo.com ...
The old adage for the retail investor: If you can get shares in an IPO, you don’t want them, and shares you want, you can’t get.
hmmm pump and dump?
let the little guys into the buy in order to dump the shares as they plunge in price.
Obama’s goons stole several billion tax dollars from us, gave it GM in the form of tax credits, and is now handing them over to the ChiComms. High treason.
The list, ping
Let me know if you would like to be on or off the ping list
The secured bondholders that got screwed in the bankruptcy should be suing for the proceeds from this IPO.
Some of the biggest holders of those GM bonds were public employee pension funds.
Let me see if I have this right.
When Obama took over GM, the shareholders got scalped and Obama gave much of the lost equity to the United Auto Workers Union, the union that was largely responsible for GM needing to be bailed out.
Why would I want to own a single share of GM stock? After all, what is stopping the UAW from destroying GM again and Obama again raping the shareholders?
Major risks involved with investing in New GM are spelled out on the S-1 filing. Some of the more blatant risks include admittance by General Motors that they "have determined that our disclosure controls and procedures are currently not effective". Essentially, the numbers can not be trusted. On top of this, a disconcerting note at the end of the risks section of the filing states that GM is exempt from federal anti-fraud laws since the offering shareholders are the US Treasury. So investors in the IPO have limited recourse if they are deceived by inaccurate financial reporting. http://www.nlpc.org/stories/2010/10/28/gm-ipo-buyer-beware
Morgan Stanley is probably in the mix because a lot of its clients held GM bonds, like me, and there is some kind of deal that is supposed to help us recoup some of our loss. I don’t understand exactly how it works and don’t really expect to recoup a whole lot.
Let's print another few Billion dollars in order to purchase the IPO of GM!
I could never invest in a bailout company, also thought it was wrong for GE to buy 25,000 Chevy Volts. It is just wrong.