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August 16, 2010



The obvious concern is whether this IPO is being done now for political reasons. If all goes as planned, shares can be trading a few days before the election, providing campaign fodder for a party that is likely looking at significant losses in November.

The government (i.e. the lead shareholder) is out there right now trying to portray GM as an example of successful intervention. Normally, in an IPO, there is a "quiet period." While technically, GM management is abiding by the "quiet period," it's hard to argue that the government doesn't have a conflict of interest. Potentially, the SEC could also let another regulator perform a "secondary" review, though for obvious reasons the Canadian regulator would be out of the question. The UK's FSA is a possibility.

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