November 17, 2010

General Motors Initial Public Offering

The GM IPO is pricing today.  Bloomberg Businessweek has a good summary of the deal.  This is going to be a huge event, and will be very closely watched by everyone involved in the markets.

I think it's a no-brainer to buy the stock at the open of public trading tomorrow, almost regardless of price.  There are just way too many powerful interests that need to see this offering go well, and for the stock to perform well, at least for a while.

This would be a pure cynicism play, with no regard for the fundamentals.  As I've noted previously, fundamentals are almost entirely meaningless in the current market environment.  This will eventually change, but with an IPO that's this important, there is almost no way in hell that the stock price will drop for a while.

The broader market could do almost anything.  I've seen markets rally strongly on a big, successful IPO, and I've seen markets sell off as a big IPO sucked the air (and money) out of everything else.  But I think that, for the medium term, mindlessly buying GM is the correct thing to do.

Posted by: Hermit Dave at 11:47 AM | Comments (1) | Add Comment
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1 First day close of trading:  Well, that wasn't particularly pretty.  Up a buck from the IPO price, but down a buck from todays opening price.  The FED better print a couple extra billion to prop this up if they don't want their buddies at the Treasury to look like a bunch of assholes.

Posted by: Hermit Dave at November 18, 2010 01:44 PM (sqGe2)

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