It’s no secret that General Motors (“GM”) has it’s Initial Public Offering (“IPO”) this week.
What might be a secret to the masses, however, is it’s truest underlying purpose.
The government lent money to GM. There is some thinking that the government could own as much as sixty-one percent (61%) of GM. And, the big auto-maker, as leading and cutting-edge as it’s vehicles have become, will struggle for decades to pay our thinly stretched United States Treasury back – and, it does not have a prayer of meeting it’s pension obligations.
So, they, that insidious “they” (no doubt led by the pipe-smoking-black-dog), mind you, are going to foist the problem on the American Citizens the very best of the good old fashioned way, certainly time-honored… By manipulating the stock market.
Here is how this particular effort will play-out. You simply need to make the decision if you are going to benefit, or keep getting your collective asses kicked.
The IPO will likely open up around $28.00 a share. Insiders (by many a definition) will pay less. For example, the United States Treasury is going to own shares as will friends of the big brokerage houses. JP Morgan is the syndicate lead and they are making all manner of new friends on Capital Hill with this play. This is not widely publicized for obvious reasons. In any event, based on the aforementioned loan details, the Treasury will break even when the stock hits approximately $44.00.
So, it’s a good bet the stock will do just that, and then some.
I’m guessing there will likely be close to a $6m billion over subscription of the stock leading up to the IPO. My experience tells me we’ll see about $1 billion in roiling. Then that “over-hang” of back-orders will kick the stock up. After that, it’s all about “management”.
This is not evil. This is simply the way things work. You, why not you, can argue it’s part of the American dream.
I have to say something. It’s one of the many reasons you read this Blog. And, it’s something a Prudent and Optimistic Gentleman finds, required.
Good luck. But, there is little of that actually involved. Fortuna, perhaps, eh Dr. Pappas?
UPDATE 11/17/2010 @ 1pm: VOILA! – GM Confirms Expanding IPO by 31 percent
Peace be to my Brothers and Sisters
Brian Patrick Cork