Few investors on LI buying GM stock

Financial planner Allan Pelkonen shouted Thursday from his Melville office to traders and investment advisers.

"Hey guys, has anyone gotten calls for GM today?" asked the Ameriprise Financial adviser.

There was laughter - and a report of just one out of 1,200-plus clients buying General Motors' new stock in Thursday's initial public offering.

Despite that, the auto giant's newly offered stock closed at $34.19 Thursday after peaking at $35.99 and bottoming at $33.89.

The GM IPO could wind up as the largest in history. Earlier this week, GM raised the high end of its initial price range from $29 to $33 and increased the number of shares it was offering from 365 million to 478 million common shares because investor demand was so high. Counting preferred stock issued by the company, the deal's value could top $23 billion.

Still, this and future sales could fall short of repaying last year's $50-billion government bailout.

"It's great for us taxpayers that we're getting some money back," said Pelkonen, who drives a GM car. "But I want someone else to own it. I don't want my clients owning it."

Several Island-based advisers said they're warning clients to stay away from GM's "hyped-up" stock, because its problems - high manufacturing costs and an unexciting product line - haven't gone away.

But businessman Paul Conte bought anyway. He owns Chevrolet and Cadillac dealerships in Freeport, and he thinks the stock prices reflect confidence in GM. Investors "are putting their money where their mouths are," he said.

Mark Calisi, owner of Eagle Chevrolet in Riverhead, senses relief, saying many did not want to buy a car from the "U.S. government."

President Barack Obama said Thursday that GM was on its way to becoming a "success story" that wouldn't have been possible if he had abandoned the auto industry, as many wanted.

- With wire reports