How To Correctly Play This Upcoming IPO of the Year
So this may be the year that 10 years from now you will either remember in glory or remember in pain. The company that comes back to life once again. GM is that company and it isn't the old GM, but the new and improved GM. The new and improved car company of America. Of course you can always ignore this IPO like many IPOs before it. But is it really wise?
Won't get into specifics but will break this IPO down qualitatively. We know GM has a lot of debt - over $40 billion actually. We know GM has had a rough recent history - failed cars, failed business, and lousy improvements. We know the current economy is not the greatest for this IPO. But what economy is great? You mean the dot com bubble where everything was awesome and IPO's soared to crazy heights only to fall to zero months later?
The GM IPO this year could be epic for your portfolio, your future, and your retirement. You could be one of the ones that bought that "great car company" in 2010 while it was underpriced. So what does GM have going for it?
1. Positive revenues of $2.2 billion in first half of 2010 in a market that is declining
2. If TSLA's IPO is of any hint, with an opening bid at $19/share and soaring to over $30/share in just a few days before dropping, then GM at the very least can be a quick hit n run trade.
3. Volt. They say it is unproven technology. They say it will cost too much. They say it can't penetrate the market. But they said the same thing about Microsoft Windows. The Volt could be the 21st century's version of the Model T. It could revolutionize the economy. It can make dependence of oil far less. It could bring other companies that feed off of electric cars into the limelight.
4. Hope. In a country where wealth is being destroyed daily, GM can be the ticket to paradise.
I'm only in my 20's. Will I turn my back on GM's IPO out of fear of losing my entire investment? Nope. You don't get many shots like this in a lifetime. Have I got to buy MSFT again? How about GOOG?
This trader will be definitely buying the New GM!