Halftime: Top Traders Plays on GM IPO
Investors are awaiting a massive stock offering from General Motors, as the automaker confirmed it will increase the size of its initial public offering by 30 percent. If GM can raise the expected $22.4 billion, it will be the largest IPO in US history.
How should you play the GM IPO?
Instant Insights with the "Fast Money" traders
Pete Najarian, co-founder of optionMONSTER.com, said he thinks there's "no doubt" the stock will pop on its first day of trading Thursday. What remains to be seen, however, is whether GM will be able to maintain those gains three months from now. For that reason, he isn't sure GM is a long-term play.
GM's success will depend on the overall strength of the economy, Najarian said. Lucky for them, we've continued to see Ford Motor's numbers improve quarter-after-quarter. But that doesn't mean GM doesn't have a lot of work to do.
"I think GM's going to have to prove that they are the company that everybody's been building them up to be," Najarian said. "That they've actually come up from the ashes."
If you're set on playing GM, Patty Edwards of Trutina Financial thinks there's a trade in there somewhere. Edwards prefers Ford, though, because of CEO Alan Mulally's leadership style. She credits Mulally with Ford's recent success.
Speaking of Ford, Todd Gordon of FOREX.com noted the stock has seen a 21 percent gain in the past month. Gordon puts resistance at the $18 level. From a valuation standpoint, he thinks Ford's valued slightly ahead of where GM should IPO Thursday. For that reason, he anticipates profit-taking at that $18 level.
Elsewhere in the auto space, Edwards likes Tata Motors and AutoZone on the GM IPO. Veracruz founder Steve Cortes recommends auto suppliers TRW Automotive and Magna International .
Watch the video to see the full conversation on the GM IPO.
DYNEGY BATTLE CONTINUES
Renown investor Carl Icahn is facing a new battle in the Dynegy saga after its board accepted a sweetened $5 per share takeout offer from The Blackstone Group and pushed back its planned shareholder vote until Tuesday.
Icahn, currently Dynegy's largest shareholder, called Blackstone's last offer of $4.50 too low and Seneca Capital says Dynegy's valuation is at over $6 share.
To analyze these developments, the "Fast Money" desk spoke with Paul Fremont, an analyst at Jefferies. Watch the video to see the full conversation—it starts at 3:30.
CALL TO THE FLOOR: PG & E
The dividend-rich utilities sector is treading water this year, but what will happen to these stocks once a Republican majority takes over the US House of Representatives? For Wednesday's "Call to the Floor," the CEO of one of america's largest utility companies spoke with the "Fast Money" desk. Watch the video to see the full interview with Peter Darbee of PG & E .
CALL THE CLOSE
Gordon is long sterling against the euro in anticipation of a bailout of Ireland.
Edwards staying hedged.
Cortes thinks the market could go lower should Apple break $300 a share.
Najarian is encouraged by the volatility, but discouraged by the Shanghai Composite — it's down roughly 10 percent on the month.
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Trader disclosure: On November 17, 2010, the day this video was recorded, following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Pete Najarian owns (F) bonds. Pete Najarian owns (CNI) and (MRVL). Pete Najarian owns (WLT) calls. Pete Najarian owns (MEE) calls. Pete Najarian owns (GDXJ) and call spreads. Steve Cortes is short the Nasdaq 100. Steve Cortes is short (FXI). Steve Cortes is short (AAPL). Steve Cortes is long (GOOG). Steve Cortes is long the U.S. Dollar. Steve Cortes is short the Mexican Peso. Steve Cortes is short the Canadian Dollar. Steve Cortes is short the Korean Won. Steve Cortes is short Corn. Steve Cortes is short Crude Oil.
Funds managed by Gordon are short Euro against the British Pound
Edwards owns (AAPL) for clients
Edwards owns (COST) for clients
Edwards owns (AZO) for clients
Edwards owns (TAL) for clients
Edwards owns (BRKB) for clients
Edwards owns (F) for clients
Edwards owns (TSLA) for clients
Edwards owns (TTM) for clients
Edwards owns (SH) for clients
Edwards owns (GLD) for clients
Edwards owns (PGM) for clients
Jefferies makes a market in (DYN)
GE Is The Parent Company Of CNBC
CNBC.com with wires.