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The initial public offering of Government Motors will price tonight. The offering, the size of which was expanded by 31 percent to 478 million shares due to investor demand, has also had its target price raised from $26-$29 to $32-$33. Given that the offering appears to be nearly 7-times oversubscribed (seven shares wanted for every share offered), $33 seems a safe bet.

While I'm not bullish on GM in the long-term, at $33 the stock does appear relatively cheap versus current earnings and it wouldn't surprise me to see the stock trade substantially higher immediately upon opening for trade on Thursday. Also, people will be buying in anticipation of the stock being added to the S&P 500 in short order which will require "index funds" to buy many millions of shares regardless of the price.

The US government, the Canadian government, and the UAW's health care trust are all selling stock. Even at the higher IPO price, the stock will have to appreciate substantially before the Treasury sells the rest of the government-owned shares in order for taxpayers not to take a bath on the bailout.

It appears that "retail" investors, which means individual public customers, will have a hard time getting any shares. Major retail brokerage firms like E*Trade, Ameritrade, Scottrade, and Charles Schwab are being shut out of access to the offering. Instead, all the shares will go to the biggest hedge funds and other clients of the biggest investment banks. Many of those funds and banks will simply sell the stock if it spikes 10-20 percent on its first day of trading, as expected.

There is justifiable anger among many about government using taxpayers to bail out GM and then handing "free money", perhaps a billion dollars in one day, to investment banks and hedge funds rather than insist that most of the IPO actually go to retail customers, i.e. the very taxpayers whose money was used to further Obama's adventures in the auto industry.