GM IPO Leaves Small Investors Behind

(TheStreet) -- The little guy appears to be losing out on the General Motors initial public offering. Trading shops like E*Trade ETFC, TD Ameritrade TD and Charles Schwab SCHW aren't getting access to the GM public offering, expected to occur next week. Despite 35 underwriters and at least 365 million shares, there isn't enough to distribute to online brokers that cater to small, retail investors. "We're not participating in the GM IPO because the underwriters we normally work with were very low on the priority list and we wouldn't have been able to get an adequate allotment of shares," Schwab spokeswoman Sarah Bulgatz said in response to questions from TheStreet. "Some IPOs we get, others we don't. It just depends often on how much is available and who the underwriters are and what kind of retail distribution they have." Similarly, a TD spokeswoman said the company would not be participating either because "we have been informed that we will not receive an allocation of shares." E*Trade was reportedly left out as well. Their exclusion from GM's offering stands out because the company received more than $50 billion in bailout funds from taxpayers, just $7 billion of which have been returned, according to ProPublica. That figure doesn't include $16 billion in additional aid to GM's one-time financial unit, GMAC (now known as Ally Financial); or $290 million provided to GM Supplier Receivables; or $1.5 billion in incentives committed to GMAC Mortgage for working out troubled borrowers' debt. While those companies are no longer housed within GM, they originated there, contributed to its financial woes and received taxpayer assistance, too. Many taxpayers could get access to the deal without even knowing it, via their mutual funds or retirement plans run at an arm's length by giant brokerages. But those who want a piece of the action by actively investing online will get shut out. Continue reading the article.