CNBC has reported that GM will not allocate any shares in its IPO for customers of Charles Schwab (NASDAQ: SCHW), TDAmeritrade (NASDAQ: AMTD), and E*Trade (NASDAQ: EFTC). That means retail investors are unlikely to get shares in the offering.
It should not matter much. The GM shares are overvalued at $30, which would mean the IPO, with over-allotments–bring in $15.6 billion.
GM wants the federal government’s share of the company’s ownership below 50%, so the price of the stock will be relatively aggressive.
The shares are not worth nearly $30. GM is still in trouble in the US market where it continues to lose market share to Ford Motor (NYSE: F), the Japanese, the Koreans, and the Europeans.
GM made $2 billion in the third quarter, but that won’t last.
Douglas A. McIntyre