GM’s IPO might race by small investors

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All U.S. taxpayers -- from the richest to the poorest -- helped rescue General Motors Co. when the federal government bailed out the troubled automaker last year.

But while many wealthy individual investors stand to profit from the company’s highly sought-after initial public stock offering next week, it appears the same can’t be said for the less well-off.

That became apparent Friday when leading discount brokers such as Charles Schwab and TD Ameritrade said they had not been allocated shares of the IPO to pass along to their clients.

Customers at full-service brokerage firms such as Smith Barney -- whose investment-banking arms are underwriting the deal -- will have access to GM shares. Those individuals could see quick profits if the shares surge out of the gate, as some experts think they will.

But full-service firms tend to cater to wealthier people -- so-called high net worth investors -- while discounters have a wider range of less-well-heeled customers.

It’s not unusual for little guys to be shut out of hot IPOs -- it’s standard practice on Wall Street.

But considering that all taxpayers saved GM from the dust bin, and that the government made a point of stressing that small investors would have access to the deal, many individuals might wonder why they’re being left on the side of the road.

-- Walter Hamilton and Stuart Pfeifer