SILLY FOOL GM IPO IS NOT FOR YOU

Discussion in 'The Fire For Effect and Totally Politically Incorr' started by cycloneman, Nov 17, 2010.

  1. cycloneman

    cycloneman Well-Known Member

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    We must learn our place. And who said Obama was different then the rest?

    http://www.fool.com/investing/general/2010/11/15/general-motors-ipo-sorry-no-pie-for-you.aspx

    Do you want a piece of the General Motors IPO? Get in line.

    Or perhaps "get out of the line" might be a more accurate description of how the U.S. Treasury is handling this IPO. For all the talk of how "we the people" own "Government Motors," and how we'll soon "get our money back," with interest, the facts of Thursday's IPO prove one thing certain: This IPO is being run by the bankers and for the bankers.

    Sorry, small investor. No pie for you
    Why do I say that? Well, consider: Say you're an individual investor, hoping to cash in on cheap IPO shares at their undervalued offering price. How are you going to do that?

    Probably, you plan to log on to your online brokerage account at Schwab (Nasdaq: SCHW), TD AMERITRADE, or E*TRADE (Nasdaq: ETFC) Thursday morning, and place an order to buy the shares at their advertised $26-$29 offering price. There's just one problem with that plan.

    It won't work. They ain't got the shares to give you. With 365 million shares on offer, and 35 banks brought in to underwrite the offering and distribute the shares to interested buyers, the major discount brokers catering to small investors like you and me have not been allotted shares. (Caveat: Fidelity apparently managed to acquire a small allotment from its relationship with Deutsche Bank -- but Fidelity won't give you a piece of this pie unless you have $500,000 invested with it.)

    Instead, the bulk of the shares going up for auction Thursday will be issued via the U.S. government's favored financial institutions -- giants such as Morgan Stanley (NYSE: MS) and JPMorgan Chase (NYSE: JPM), the co-lead underwriters. Or Goldman Sachs (NYSE: GS), Bank of America (NYSE: BAC), and Citigroup (NYSE: C), who also have the inside track on this IPO.

    What's a Fool to do?
    Sure, some investors have relationships with these megabankers and so will be able to acquire GM shares at the offering price. These lucky fools will likely make out like bandits as GM shares rise from their understated offering price, to something approaching a fair value. As for the rest of us, we'll have to "buy after the pop" (if we dare). We can still own GM -- but only by purchasing shares second- or third-hand from those who've made the initial profit.

    The only sure thing in this IPO: Before you get a chance at your piece of the GM IPO pie, the megabankers will get theirs. Back of the line, Fool.
  2. carver

    carver Moderator

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    This country is going to the dogs! What a load ................
  3. Jeff Midguard

    Jeff Midguard New Member

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    One more reason not to shop at the G.M. stores.
  4. glocknut

    glocknut New Member

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    THE FORUM MASCOTT...

    As if a test drive was not allready enough to discourage a GM purchase.... :D

    mike
    gn
  5. cycloneman

    cycloneman Well-Known Member

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    NOTHING PUBLIC ABOUT THIS PUBLIC OFFERING IS THERE??????

    FUNNY HOW YOU CAN TAKE TAXPAYER MONEY TO TAKE CONTROL OF PRIVATE BUSINESS, THEN DO THIS. ON TOP OF ALL OF THIS GM IS NOT GOING TO PAY TAXES FOR WHO KNOWS HOW LONG.

    WOW! WHAT CHANGE!

    BEYOND BELIEF. WAKE UP CAUSE THEY KNOW EXACTLY WHAT THEY ARE DOING. ANYBODY WHO GIVES THEM THE BENEFIT OF THE DOUBT - SHAME ON YOU!!!!!
  6. keepitlow

    keepitlow New Member

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    People got wiped out in GM and are ready for more.

    But lots of the buyers are banksters that don't care where they do with the $$
  7. Carne Frio

    Carne Frio Member

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    You can buy those shares for less than $20 by
    next January, if GM's performance history is
    any guide.
  8. Jeff Midguard

    Jeff Midguard New Member

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    That's what I'm thinking. IPO sounds way overpriced.
  9. NRA_guy

    NRA_guy Member

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    Amazing! Thousands of GM stock holders got screwed by the GM bankruptcy and now people want to buy back in.

    There really is one born every minute.

    If I had money to invest and could buy GM stock, I wouldn't.

    I have not seen anything about how the unions are coming out on this deal.
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