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GM IPO: UAW's Pump and Dump?
National Legal & Policy Center ^ | August 19, 2010 | Peter Flaherty

Posted on 08/19/2010 12:25:47 PM PDT by jazusamo

 

UAW/GM logosMore evidence that the GM IPO is being hurried for political purposes is found in the IPO registration filing yesterday. The company cannot assure the accuracy of its financial information because of weaknesses in its internal controls. How can GM offer and price shares if it cannot even attest to its own financials?

The shares being offered for sale will come from the U.S. government and the United Auto Workers (UAW) trust fund, another red flag. If the UAW has such great confidence in the future of the company, why is it selling? Is it to cash in on the superficial media accounts of GM’s “progress,” when it knows the long-term future of the company is less rosy?

Few shares will initially go to retail investors. Instead they will go to hedge funds and professional investors who have no long-term interest in GM. They seek to flip the shares for a profit.  Although there is nothing inherently wrong with speculation, the circumstances of this offering create an unholy confluence of interests. The administration wants to have an offering before the elections, the UAW wants to dump shares, and Wall Street is ready to capitalize on the White House-induced hype, no matter what happens following the elections.

The offering is expected to raise between $10 and $15 billion. GM’s unfunded pension liabilities alone are $27 billion. This company has a long, long way to go to become viable. Reports of GM’s “comeback” are premature.

Is the GM IPO also a pay back to Wall Street banks that stand to make millions in fees? The offering could be done more cheaply by the Treasury. Obama’s verbal assault on Wall Street bankers has been conducted with a wink. Almost uniformly, bank executives supported Obama’s presidential campaign. Is the IPO a consolation for enduring Obama’s demagogic, but politically necessary, attacks?



TOPICS: Business/Economy; Culture/Society; Government; News/Current Events
KEYWORDS: gm; ipo; nlpc; uaw

1 posted on 08/19/2010 12:25:49 PM PDT by jazusamo
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To: jazusamo

...we’ll see how much demand the is for the shares after the initial IPO...I bet not much...this thing has Obama’s fingerprints all over it....and who would buy anything that he’s meddled with?


2 posted on 08/19/2010 12:29:33 PM PDT by STONEWALLS
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To: STONEWALLS

Good point and I’d bet you’re right.


3 posted on 08/19/2010 12:31:20 PM PDT by jazusamo (But there really is no free lunch, except in the world of political rhetoric,.: Thomas Sowell)
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To: jazusamo

Dump is right. GM/UAW is a bag of s**t.


4 posted on 08/19/2010 12:33:02 PM PDT by Frantzie (Imam Ob*m* & Democrats support the VICTORY MOSQUE)
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To: jazusamo

“The company cannot assure the accuracy of its financial information because of weaknesses in its internal controls.”

LOL! The corrupt UAW steals anything it can get it’s hands on. Internal controls?! LOL! What internal controls!

They robbed: dealers, white collar workers, pensions, bond holders, common stock holders, suppliers and taxpayers.


5 posted on 08/19/2010 12:35:14 PM PDT by Frantzie (Imam Ob*m* & Democrats support the VICTORY MOSQUE)
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To: jazusamo

Ahh...the initial shares go to Obama’s hedge fund buddies. They will drive the worthless stock up until the suckers jump in and then will bail out.

Un-****ng real.


6 posted on 08/19/2010 12:37:09 PM PDT by Frantzie (Imam Ob*m* & Democrats support the VICTORY MOSQUE)
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To: STONEWALLS

Read the notes again. The initial shares are going to hedge funds and institutions. Why? Well the public and mutual funds “ain’t” that dump. The hedge funds and institutions will trade them up like they did to dot com trash.

Joe Public will say “oh gee GM stocks is up a lot - I better buy some.” Then the hedge funds will dump it all.


7 posted on 08/19/2010 12:39:17 PM PDT by Frantzie (Imam Ob*m* & Democrats support the VICTORY MOSQUE)
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To: jazusamo

Sounds like a Ponzi scheme to me.


8 posted on 08/19/2010 12:39:58 PM PDT by Mr Ramsbotham (Laws against sodomy are honored in the breech.)
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To: jazusamo

My wife and her sisters all had shares in GM that the received from the estate of their mother who received them from the estate of her father. And Obama and company just stole them all through the bankruptcy court.

NOW they are going to be offering shares again that eventually the little people, (That’s us folks), can buy.

Forget it. The anger runs too deep to forgive and forget.


9 posted on 08/19/2010 12:40:34 PM PDT by The Working Man
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To: Frantzie

It’s really pathetic our tax dollars saved the UAW but I believe the Volt could reverse that.


10 posted on 08/19/2010 12:41:02 PM PDT by jazusamo (But there really is no free lunch, except in the world of political rhetoric,.: Thomas Sowell)
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To: Frantzie

The thing is that anyone silly enough to fall for this shouldn’t be investing in stocks in the first place.


11 posted on 08/19/2010 12:44:21 PM PDT by jazusamo (But there really is no free lunch, except in the world of political rhetoric,.: Thomas Sowell)
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To: The Working Man

Forget it is right. Anyone I know who considers buying it will get an earful from me.


12 posted on 08/19/2010 12:47:23 PM PDT by jazusamo (But there really is no free lunch, except in the world of political rhetoric,.: Thomas Sowell)
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To: jazusamo
How can GM offer and price shares if it cannot even attest to its own financials?

Because we all know that the Chevy Volt is going to be so profitable in the future! And we know that Obama, the UAW, and the newly enlightened GM management have hopey-change!

Because we don't have to use common sense or rational analysis anymore. All we need to do is chant the mantra of "Yes We Can" and keep the faith in rainbows and unicorns.

13 posted on 08/19/2010 1:35:42 PM PDT by Skepolitic
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To: jazusamo
This issue is not worth the paper it's printed on.

We have evidence that the govt and the UAW will collude to rob any/everyone of their stake in this "company". VERY RECENT evidence.

Anyone who buys this stock is stupid.

14 posted on 08/19/2010 1:42:55 PM PDT by Mariner (USS Tarawa, VQ3, USS Benjamin Stoddert, NAVCAMS WestPac, 7th Fleet, Navcommsta Puget Sound)
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To: Mariner

Well said!


15 posted on 08/19/2010 1:48:38 PM PDT by jazusamo (But there really is no free lunch, except in the world of political rhetoric,.: Thomas Sowell)
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To: jazusamo

SEC rolls over....
.


16 posted on 08/19/2010 2:03:42 PM PDT by editor-surveyor (Obamacare is America's kristallnacht !!)
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To: Frantzie

“Ahh...the initial shares go to Obama’s hedge fund buddies. They will drive the worthless stock up until the suckers jump in and then will bail out.

Un-****ng real.”

The IPO would go to institutional buyers including pensions, mutual funds, and hedge funds. That is the public or the little guy if you prefer. The hedge funds are generally comprised of investors with over 100k or more but the pensions and mutual funds are a mix of mostly the little guys. Secondly, despite occasional reports that the UAW is bailing out, I can’t find one credible source that this is so. The UAW is trying to insure their retiree welfare funds with the equity so I could see where they might want to diversify a portion but I sure can’t find it anywhere in a serious business journal. I think that part of it is speculative at this point. Regardless, Obama wants this as a PR tool before the elections but it can cut both ways. If the IPO fails or looks weak, I wouldn’t be surprised to see it pulled back until after Nov.


17 posted on 08/19/2010 2:32:08 PM PDT by Bogeygolfer
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To: jazusamo

Anyone that buys any of GM IPO’s is asking to be fraked just like they fraked those previous bondholders...... =.=


18 posted on 08/19/2010 4:15:43 PM PDT by cranked
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To: cranked

.
‘Zackly!
.


19 posted on 08/19/2010 4:17:46 PM PDT by editor-surveyor (Obamacare is America's kristallnacht !!)
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To: The Working Man

Technically “Old” GM is still trading under the symbol MTLQQ.PK.

Closed at 42 cents today.


20 posted on 08/19/2010 4:24:46 PM PDT by nascarnation
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