After IPO, where does GM go?

DETROIT - IPO. Those three letters conjure up the dot-com heyday of the 1990s, the era of fast money and instant millionaires.

But most of us didn't get rich quick back then on Netscape or other Internet-related IPOs. And what do we know about initial public offerings of stock?

With General Motors Co. expected to roll out its new IPO Nov. 18, we could all use a primer. Here are answers to frequently asked questions:

Q What is this GM "roadshow" we keep hearing about?

A The roadshow is the big show, if you will, of initial public offerings. The company issuing stock has a marketing campaign that it takes on the road to several major cities, often New York and Chicago, but GM's road show also will go to Europe.

"They go on the road to present the investment story to potential investors," said Bill Buhr, IPO strategist for Morningstar.

The roadshow involves meetings with mutual fund managers, hedge fund managers, endowments or pension funds. It also helps the issuers of the IPO judge its potential popularity, and helps underwriters better determine how to price it.

A GM does not slap a sticker on the window. Instead, the underwriters -- or investment banks -- involved work up pricing and marketing for the stock offering.

Q I'm not dead yet, why should I care about underwriters?

A Not undertakers -- underwriters. Often for a hard-to-get IPO, your best chance of getting shares is if you are a client of an institution that's an underwriter for the deal.

The GM deal is huge and involves Morgan Stanley, J.P. Morgan Chase, Barclays Capital, Bank of America, Merrill Lynch, Credit Suisse and Citi. For a list of underwriters, you look at the prospectus.

Q What's a prospectus?

If you want details on the GM IPO, you can see it at tinyurl.com/56bbew.

The original S-1 filing with the Securities and Exchange Commission for the GM initial public offering was made Aug. 18. Other amendments were filed after that and will continue to be filed during the IPO process.

GM employees, retirees and dealers also had a chance to sign up in October to buy shares in the IPO.

Q Are there IPO blunders?

A Ever hear the story of Vonage? The Internet telephone service had a "friends and family" deal for its IPO in 2006. But early investors didn't feel very friendly toward Vonage.

Some investors sued Vonage, charging that company officers offered shares to customers because they knew institutional investors who normally buy IPOs would be reluctant to buy Vonage stock, given the lack of profits.

Q Flippers? IPO pop?

A Now here's some lingo that adds sizzle (maybe even some steak) to the IPO madness.

IPO speculators -- known as flippers -- go after quick money and want to sell after a first-day "pop" in the share price.

But not all IPOs pop. Some Michigan investors might remember that Domino's didn't deliver after its IPO back in 2004. The Ann Arbor, Mich.-based pizza maker lost 50 cents a share in its first day on the New York Stock Exchange.

Q How much pop has the new GM got?

A "I don't think there's going to be a 'pop' on General Motors," said Menlow, because it is such a massive offering.

Others note that while the stock is new, GM isn't a new story. The new GM has posted a few profitable quarters, but the auto industry is still the auto industry and, some might say, GM is still GM.