Thanks for responding to yesterday's article about GM'S IPO.
Let's get right into your responses...
I am just curious as to how a common average investor
gets a chance at buying shares of GM. How would you go about
It's difficult for everyday investors to get in on an IPO before
shares hit the major exchanges. Unless you are a preferred customer
of an investment bank, or have a broker that has the right
connections you'll just have to buy at the market price once the
company goes public.
Since I've gotten a lot of questions regarding investing in
IPOs, I put together a Special Report that explains the basics. You
can access a PDF of this
free special report on IPO investing here
What a great company, it screwed it's long time employees by
filing bankruptcy but, the big guys still got their bonuses now
they want to do it all over again after they dumped all their
obligations. I thought that the object is to pay all your
obligations first and then if there is money left, you get a bonus.
If I ran my personal life that way, I'd be out on the street. By
the way, I have never been a GM employee
. - Kathy
I read your article on GM IPO, was wondering if you feel like
that is a purchase to sell or hang onto for awhile. Was also
wondering what your thoughts were on GM IPO driving Ford stocks
My holding period would really depend on the stock's performance
after the IPO. I don't think the GM IPO will have much of an impact
I think GM's doing a lot of things right - just not nearly as
many as Ford, which is why I don't think GM is a buy with their
IPO. When it comes to American car makers and their ability to
make cars people want to drive - it's Ford, Ford, Ford.
Let's do a head to head comparison:
Fiesta vs. Aveo. Not even a game at this point. The Fiesta
gets rave reviews by press and owners while the Aveo is the
clunker of GM's fleet and about to be canned.
Focus vs. Cruze. The Focus has history but the Cruze looks
good. It's close, that's for sure.
Fusion vs. Malibu. Ford wins again.
Mustang vs. Camero. Ford leads again with a redesign of the
Mustang years before GM decides to do the same with the Camero.
I'd hazard to say the Dodge Challenger would edge out the Camero
Ford F150 vs. any GM truck. Ford's been leading this category
for years. It's not about to stop now.
??? vs. Volt. I want to like the Volt, I do, but they
scrapped the sporty design and then slapped on a price tag in
excess of a Mustang GT. No thanks GM.
Ford Credit vs. ...Oops, sorry GM, you sold your control in
GMAC (now Ally). Your loss, while Ford is generating hundreds of
millions from their finance wing.
Ford increasing market share for 2 years running vs. GM,
still the leader but decreasing market share.
Ford repayment of debt and no bailout money vs. "Government
Motors" handout. This gets GM's bottom line in order a lot
quicker than Ford but don't underestimate the good will, and
positive image, generated by Ford within North America for being
the only car company to do it without a handout.
I like what GM is doing and they are getting better. The
Cruze is proof of that and they have managed to strengthen brands
like the Malibu and bring in hot designs for the Camero. But to
me it looks like they've been playing catch up to Ford, in terms
of design, quality, and the feel of the drive since Alan Mullaly
took over at Ford, which is why I still see GM as risky
If there's any pullback on Ford with the GM IPO, I know where
my money is going.
I enjoyed reading this email quite a bit, thanks for the
comparisons Sean. I tend to agree with you that I prefer Ford over
GM as a long-term investment. However, I still think GM's stock
could be a profitable investment after its IPO.
Why would anybody invest in this company? What happened
to the last stock holders and bondholders? They got zip and it
could happen again. No Thanks.
Valid points Jake, but I don't think GM will go bankrupt again
in the near future. Remember that sometimes the most disliked
companies have the best performing stocks - look at
the stock is up 60 percent since its June 25 low of $27.02.
I completely understand anyone who doesn't like GM because of
what the company did to prior stakeholders, that's why I called GM
an 'unpopular company' in yesterday's article. But the fact remains
that this company is moving on with an IPO after its prior
bankruptcy so now investors have to decide what the future
I'd love to write an article about socially responsible
investing and compare the relative returns of 'virtuous' vs. 'sin'
stocks. Any ideas on this subject? Send me your thoughts at:
I am a fairly new investor because I am a college student. I
have started to learn about IPOs, what they are, that sort of
thing. If I wanted to invest in GM's IPO, do I have to wait until
it hits secondary markets like the NYSE? Where can I buy the
initial offering between $26-$29?
Joe, check out the
free special report on IPO investing
that I mentioned above. Yes, you'll have to wait until GM hits the
major exchanges before buying.
You ask for comments so I'll take the easiest of many. I'm
surprised that you said,
"If you haven't realized the obvious yet, GM is one company
that the U.S. government won't let fail. So if you want to invest
with the full backing and support of the U.S. government - then
you should definitely consider picking up shares of GM when they
Just look at what happened to the equity and debt holders when
GM went into bankruptcy. Your comment almost sounds like to
government is guaranteeing your investment when this is clearly not
the case. -
You're right Bob I'm not suggesting the government will
guarantee your investment. But I do think it'll do what it can to
help GM succeed, and I think that support will help shareholders of
GM over the next year (regardless of what happened in the
As just one example, we know that President Obama has a very
cozy relationship with the United Auto Workers union. They endorsed
him and I'm sure voted for him, in large numbers. In kind, the
Federal Government granted the UAW a minority stake in GM. They
currently own about 17.5% of the company. So, it wouldn't be
prudent for Obama to let GM sink while one of his largest
constituencies (unions) still owns part of the company.
Ok, that's it for comments today. Let me know if you have any
ideas on socially responsible investing, and in particular how this
strategy could be of benefit (or be detrimental) to small cap