Poll: Do Taxpayers Really Want GM IPO Shares?

Give taxpayers a shot at GM’s IPO shares! That is, assuming anyone wants the shares.  There has been an interesting development of late in the General Motors public offering.  It revolves making shares of the IPO available to Joe Public.  Effectively, this would allow Main Street America to get shares at the IPO price rather than just the institutions and wealthy investors who have relationships with their brokers.  We’ve only put in $50 billion.

The rebuttal here is a simple one… Does anyone from Main Street America want to buy the new GM shares at the IPO price?  This is a legitimate question and we want to know what you think.  After a big wave of selling in most of the stock market this week, do cab drivers, teachers, doctors, mechanics, government workers, and those in every other profession actually want to buy shares at the IPO price?  For starters, the terms of the IPO will not be known even if GM formally files for its IPO on Friday.  Again, we want to know what you think in a quick poll:

[polldaddy poll=3611721]

If the government wants this to be run fairly, it could easily use something like the OpenIPO process from W.R. Hambrecht.  It would be simple to do and it would severely cut the fees that had to be paid.  Hambrecht could leave it up to the individual brokerage firms and investment bankers to allocate these shares down on an individual basis.  The catch is that the American public would have to still have a brokerage account at a firm with funds in the account to order the stock.

The IPO market has not been great in 2010.  There are more than 20 IPOs that were busted.  There are many who would love the opportunity to get shares.  There are many who would pass. Maybe there is another notion.  Maybe GM should offer the shares first to GM car buyers in the United States and THEN to the public.

Many in the public probably wonder if they’d even make any money buying GM.  Imagine the public outrage that would come if millions of Americans bought GM stock and the shares lost half of their value.  Then there is the positive case.  Imagine if millions of Americans doubled their money on this.  It wouldn’t repair every bit of damage, but it would be a start.

JON C. OGG