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Friday, 11/12/2010 4:24:20 PM

Friday, November 12, 2010 4:24:20 PM

Post# of 174



November 12, 2010, 12:16 pm I.P.O./Offerings


For Some, Tough Entry Into G.M.’s I.P.O.
By MICHAEL J. DE LA MERCED


Individual investors who want to buy a piece of the new General Motors when it goes public next week may be out of luck.

Three major brokerage firms — Charles Schwab, TD Ameritrade and E*Trade — aren’t taking customer orders for the G.M. initial public offering, CNBC reported Friday. Why? They’re not being allocated shares.

Demand for the offering has been very strong, and various media reports have said that the stock sale could exceed the $29 that G.M.’s underwriters had specified as the upper end of the price range.

But depriving three big brokerage firms of allocations seems to be a little at odds with what the Treasury Department, the company’s biggest shareholder, had hoped to achieve. From the Treasury Department’s guidelines for the I.P.O.:

Retail investors. We expect that interested retail purchasers will be given ample opportunity to participate, consistent with appropriate commercial practices aimed at maximizing our return and creating a stable trading market for the shares.

People briefed on the matter told DealBook on Friday that the process was meant to be no different than that of a standard I.P.O. And certainly in normal circumstances, a hot stock offering often means that investors big and small get fewer shares than they would like.

But that’s likely little comfort to individual investors who had been led to believe they could participate in an I.P.O. that promises a huge first-day bounce.

http://dealbook.nytimes.com/2010/11/12/retail-investors-face-tough-entry-into-g-m-s-i-p-o/