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GM IPO: Today is the day investors got screwed!

November 19, 2010

Today is the day new GM IPO shares are traded at $33 per share. People are buying because they don’t understand behavioral economics and that gives the new GM a misleading boost from 75 cents per share to $35 (5000%). People who hold the old GM stock call FINRA (Financial Regulatory Authority) of the federal government to find out what’s going on..

“Can I cash my old GM shares at 75 cents from before the bankruptcy for the new GM shares?”

” No you can’t. Your old shares are worth between 6 and 88 cents on the penny stock exchange.”

“That is confusing.”

“We are sorry. The law says that share holders are the last to be paid when a company in the United States files Chapter 11.”

“Then GM didn’t really go up by 5000%, it is only stated that way in the stock exchange to lure buyers. It hurt our feelings.”

“Sorry.” And a wee voice says, “Middle class investors, today you got screwed, time to get savvy, GM closing at $34 is a dismal 3% earning for an IPO. Americans don’t trust the new GM, learn the ropes, there is plenty of money for you outside the GM manipulative bankruptcy. Get savvy about behavior economics.

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