I tried to get in on this IPO when the talk was of pricing it in the low 20's. However, neither of my two brokers would give me any shares, being as how I am simply a mere mortal and not a billion dollar hedge fund or my own country.
Then it got really popular. Then greed raised its ugly head. The price went up. They issued more shares. And here's the net result, in a day's worth of five minute bars:
It finally priced at 33, but for us peons, it opened to the public at 35. Then, after a little bouncing around, it was all downhill after 10:45 AM. It finally closed at 34.19. If you had bought at the open, you'd be underwater now. If you had gotten in at 33, you'd have an underwhelming 1.19 profit.Which is not to say I don't think the New GM will eventually go higher. But I think it revisits the zone where it was originally supposed to IPO before that happens.
Now where have I seen this movie before? Oh yeah, IBKR, Interactive Brokers, another IPO that generated a ton of hoopla before it opened on 5/4/07. By some strange coincidence, the prices were pretty close to GM's today.
There was a lot of interest. IB raised the price. They diluted the offering. By the time it hit the floor, it was at 33.00. It hit a high of 34.25 that day before closing at 31.30. Sound familiar? So then what happened? Let's look at the first couple of months on its daily chart, back in 2007:
A month after opening, it was trading at 26. It briefly flirted with 35 in early 2008. Today it's at 17.80. (Disclosure: IBKR is my trading broker).Would I buy GM tomorrow? Heck no. I like the company, I drive only GM cars, but I'm not rewarding this sort of greed. Sorry guys. I'll come back and visit when you're down in the low 20's.
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