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Special Coverage GM: What Karen Finerman Looks For In The IPO

Karen Finerman knows IPOs very well and she's using some pretty specific criteria to trade this one. Does GM make the grade?

"I’m looking at GM related to Ford," she explains. And there are quite a few positive comparsions.

"On an EBITDA basis it’s somewhat cheaper," she says.

She also likes that GM holds "strategic market position" and she likes the size of the IPO. "This is an offering of significant size," she says.

"Also I ask myself if the underwriters need the IPO to work well and if managers need to own it – again I think the answer is yes."

All positives so far but then the tide turns.

"GM is more expensive than Ford on a price to earnings basis," she says.

Not good.

"Also GM's SUV and truck inventories have started to build," she explains. "If we see gas prices spike that’s a negative for sales." She also thinks the atuo industry will take a hit broadly if China stomps on the 'global growth' brakes.

Although she doesn't dislike GM, Finerman suggests there are better plays. "I think there are better comps out there," she says, "such as Ford and Daimler ."




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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; Finerman owns (AAPL); Finerman’s firm owns (GM); Finerman owns (DYN); Finerman's Firm Is Short (IWM); Finerman's Firm Is Short (SPY); Finerman's Firm Is Short (MDY); Finerman's Firm Is Short (IJR); Finerman's Firm Is Long Russell Puts; Finerman's Firm Is Long S&P Puts; Jon Najarian owns (DRYS); Jon Najarian owns (FSLR) put spread; Jon Najarian owns (LMD) calls; Jon Najarian owns (FIRE) calls; Grasso owns (ASTM), (BA), (BAC), (BWC), (C), (CSCO), (JPM), (LPX), (MOT), (MHY), (NDAQ), (PFE), (PRST); Terranova owns (UPL), (C), (PEP), (VRTS), (OXY), (GS), (POT), (AAPL), (ORCL), (MCD), (NKE)

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