A Government Motors two-fer

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Two looks at the US Government owned General Motors as they are about to issue an Initial Public Offering of stock. First, from Yahoo/CNBC:
Some Average Investors May Be Shut Out of GM's IPO
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, 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, are expected to get shares, however, as are big institutional investors and hedge funds.

"TD Ameritrade will not be participating in the GM IPO offering, as we have been informed that we will not receive an allocation of shares," said a company spokeswoman in an e-mailed statement. "We have several relationships with various underwriting firms for various products, and in this case the underwriting firm is not allocating shares for this offering."

Schwab has taken a similar position, according to a source there and an investor who sought GM shares. And with just a few days before GM shares are expected to price on the evening of Nov. 17, a notice posted on E*Trade's investor web site states that there are no "current offerings" of IPOs available to customers at this time.

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."
Second, from Manufacturing.net:
China To Take Part In GM IPO
Among the banks helping General Motors with its initial public stock offering next week are two identified by initials only: ICBC and CICC.

Americans uncomfortable with U.S. government ownership of General Motors may want to hear more: One of those banks is the Industrial and Commercial Bank of China, one of China's four big central government banks. The other, China International Capital Corp., is a joint venture run primarily by Central Huijin Investment Ltd., an arm of the state, and Morgan Stanley.

This is the first time Chinese government banks have participated in a major U.S.-issued IPO, according to IPO tracking firm Dealogic. The banks are listed as co-managers in the offering, meaning they will sell a portion of the new shares.
So not only is China holding large amounts of our national debt, they are now purchasing significant parts of our industries. This is not a good thing...

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This page contains a single entry by DaveH published on November 17, 2010 7:24 PM.

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