Boycott the GM Offering

To those familiar with the long, sordid tale of GM's bankruptcy and apparent re-emergence today as an exchange-traded issue, our headline here might be something of a mystery. How can you boycott the hot new IPO of brand new, never-tainted GM stock if you can't get any?

Precisely.

The taxpayers bailed GM out. The previous stockholders were left holding worthless paper. The bondholders got shut out (illegally, BTW) by the Feds in order for the current administration to pay off the unions that helped destroy the company. And now all the fat cats get dibs on the new stock which is virtually guaranteed to jump to the upside ("pop" in Wall Street parlance), thus guaranteeing them milliions of dollars in profits while Katie Couric's "great unwashed" sit out in the hinterlands still waiting for all those jobs Washington promised.

To be sure, indirectly, some individual investors will be getting some new GM stock via mutual funds in which they invest. A few others will get small allocations from full service brokerage firms--usually the bigger investors who are given the shares as "rewards" for keeping their lucrative business with company X.

But you 'n me? Forget it. So my advice is to boycott the IPO in this sense--if you're interested in the stock anyway, don't just go in and rush it as it bounces (or soars) above the IPO price which the lucky rich dudes get without commission, BTW. The rich guys will only be too happy to "flip" the stock to you for a quick, tasty profit and leave you holding the bag when the stock inevitably settles down--lower than the price you bought it at. You get left holding the bag.

So don't help the fat cats out. Just sit there. Should the stock drop down somewhere near the offer (dubious but possible, at least in the next couple of weeks or months), then by all means, pick some up if you insist. But in the long run, I'm not sure GM--or its unions--have learned anything, and we might get a repeat performance of what happened last time: bankruptcy, worthless stock, and ruined bondholders.