GM IPO could reignite stock market
The automaker's public offering could be the feel-good, make-money story of the year.
By Jim Cramer, TheStreet
We're lost in the miasma of the election, the Fed and the coming labor report, and no one can blame us. But right around the corner is an IPO that could ignite as much interest in the market as we have seen in years: that of General Motors.
The GM public offering is kind of like the U.S. Olympic team in 1980, the Miracle on Ice: a feel-good story, except that you get to make money from it. That's right, I believe the deal is going to be a smashing success. The key questions are who is going to get it and how can you get in.
It is not just pricing that matters, although I believe the government is going to throw it to the good guys, meaning the buyers. There's also actually a strong investment case out of China.
Auto sales had hit a weak spot earlier this spring, but they're on the mend now. Even more important, data from China out last night shows a 6% decline in Toyota (TM) sales for October, while other auto companies have gained market share.
So my thinking is that GM will have terrific growth numbers in China and more market share than we thought it would have when the deal was first discussed. Plus, this GM has a good balance sheet and a management team that I'm told is much tougher than it had been, even under Ed Whitacre -- and I thought he was terrific.
We have all approached this week with the appropriate view that it is fulcrum. But, remember, the market will be open next week at this time, and the week after, and this GM deal is going to excite a lot of people and maybe even entice them back to the casino.
At the time of publication, Cramer had no positions in stocks mentioned.
Jim Cramer is co-founder and chairman of TheStreet. He contributes daily market commentary for TheStreet's sites and serves as an adviser to the company's CEO.
Click here to follow Cramer's trades for his Charitable Trust.
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LOL I don't like companies that file bankruptcy to screw their creditors and stockholders only to come back and act like nothing happened. The government partially caused the banks fiasco but GM is a whole different story. I'll invest in Ford but I wouldn't buy GM's products or stock if they were giving them away. Hopefully China buys all the GM stock and moves them there. Let the unions screw with their government.
Tommy Subway:"Seriously though, buy American even though most of the parts are made and assembled in other countries. "
Isn't that the same as saying: Be loyal to American corporations that have been bribed for generations with tax subsides to be loyal to Americans, but instead sent the jobs overseas in the name of further profit and a f'ck you to the American people???????
I lost out as a stockholder on GM; it happens. MY real focus is that the government,( as directed to by Obama and some intelligent Congressman, both Rep and Dems), stepped in and saved what could be saved, as a good government is supposed to do.
I hope the IPO comes in at a reasonable price so that all Americans who can afford to invest in our country and its workers will do so. Regards, B
Another "no" vote here. Burned once with GM and not about to repeat the mistake in the hope that it will turn out better this time. Isn't that one definition is insanity. Yes, I do realize that as a short term play, GM stock might even be profitable.
Here is an idea: If GM is such a great buy, let the UAW double and triple down its bet. They already own a big piece of it, along with the government. This is a golden opportunity for them to own the majority of the company.
GM IPO could reignite stock market
But, is that ignition going to lead to another cigar blown up in the faces of the prefered stockholders.......like last time??????????
If anyone is dreaming that there is even a smidgon of a chance for further bailouts after the last one that basically lent our money @ "0%" in a quantity of at least 2-3x the worth or capitalization of the company, think again!
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