Did You Buy GM Stock? If So, Consider Yourself Pwn'd !

Written on November 18th as the GM IPO was first issued, with breathless excitement by the government and the media:

...have you ever seen the media cheerleading a stock that has actually been a money-maker, or indicative of a strong company/sector? Yeah, me neither. They're all johnny-come-latelys that use other people's money to buy high, and sell low.

Stay away from this POS IPO. And hold on tight to your wallet...

Today, Mickey Kaus informs us we've been pwn'd:

Greetings, IPO Suckers! General Motors' cars are piling up on dealers' lots again, the result of an apparent production surge designed to force sales during September and October in order to make the numbers look good for GM's November IPO ... sorry, I mean in order to maximize shareholder value! ... P.S.: General Motors is actually down 0.8 in market share from last November, which was hardly a great month in itself. The company's press release boasts of a market-share gain because it only counts the brands GM hasn't discontinued or sold off. Well, all right then! ...

Here's the nuts and bolts of the scam, as perpetrated by GM - with the help of the U.S. Government - upon the American people:

It is obvious that beginning in July, GM has started an aggressive channel stuffing program whereby it offload tens of thousands of cars (over 110,000 since July) on dealer lots, hoping these will get sold somehow, at some price, all the while dealers enjoy taxpayer subsidized floorplan leases which allows them to hold nearly infinite inventory. If and when the liquidation event takes place who cares? After all the company is now public and has managed to massage it artificial sales numbers sufficiently to fool investors that there is actual end demand for its cars.

So what would have happened if in October GM had held its dealer inventory flat (not declining, just flat): well, the top line number would have been 21,000 cars less sold. Which also means that total sales would have been not 169k but 148k, and instead of a 11.4% increase, GM would have reported a drop of 2.4% in November sales YoY (year to year)....

Now if Wall Street perpetrated this fraud, the entire force of Eric Holder's office would have been called upon to frog-march out the looters and liars involved, and show trials would have been the order of the day.

But since the government is in on the scam, and taking a cut, well....then it's OK, I suppose, to screw the middle-class investor who is allegedly so near and dear to the Democrat's hearts...or perhaps it is that small reservoir of cash the middle class tends to clutch onto that makes them such an attractive mark...

What did I say about holding on tight to your wallet? The government, under the auspices of the Left, are as shifty as the transient carnies that come into town every spring with the town fair...