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BREAKING NEWS FROM CNBC'S KATE KELLY: CHARLES SCHWAB, TD AMERITRADE & E*TRADE NOT EXPECTING ALLOCATION FOR GM SHARES

WHEN: TODAY, FRIDAY, NOVEMBER 12TH

WHERE: CNBC'S "SQUAWK BOX"

Following is the unofficial transcript of breaking news from CNBC's Kate Kelly. CNBC will be following the story throughout the day both on-air and online.

All references must be sourced to CNBC.

KATE KELLY: I HAVE BEEN DOING A BUNCH OF REPORTING THIS WEEK ON THE GM TOAD SHOW WHICH KICKED OFF A WEEK AGO TODAY IN THE MID-ATLANTIC AREA AND PASSED THROUGH NEW YORK AND BOSTON THIS WEEK WITH INSTITUTIONAL INVESTORS WHO ARE EXPECTED TO GET THE LION SHARE OF THIS OFFERING WHEN IT PRICES NEXT WEEK HOWEVER ONE PRIORITY FOR THE U.S. TREASURY AS WELL AS GM THE COMPANY HAS INVOLVING THE INDIVIDUAL INVESTOR AND THERE SEEMS TO BE SOME ISSUES DEVELOPING THERE WE HAVE RECEIVED INDICATIONS FROM THREE OF THE FOUR LARGEST RETAIL BROKERS AROUND THE COUNTRY THAT'S SCHWAB, TD AMERITRADE AND E*TRADE THAT I AM TALKING ABOUT THAT ARE INDICATING TO CLIENTS THAT THEY DON'T EXPECT TO RECEIVE ANY STOCK ALLOCATIONS AT ALL TO PASS ON TO CLIENTS AND THEREFORE THEY ARE NOT TAKING ORDERS AT THIS TIME. HERE'S THE STATEMENT FROM TD AMERITRADE "AT THIS TIME TD AMERITRADE WILL NOT BE PARTICIPATING IN THE GM IPO OFFERING AS WE HAVE BEEN INFORMED THAT WE WILL NOT RECEIVE AN ALLOCATION OF SHARES. WE HAVE SEVERAL RELATIONSHIPS WITH VARIOUS UNDERWRITING FIRMS FOR VARIOUS PRODUCTS AND IN THIS CASE THE UNDERWRITING FIRM IS NOT ALLOCATING SHARES FOR THIS OFFERING." THEY DIDN'T SPECIFY WHICH UNDERWRITER THEY'RE TALKING ABOUT OF COURSE THIS IS A CAST OF THOUSANDS IF YOU LOOK AT THE GM PROSPECTUS WHICH I AM HOLDING IN MY HAND RIGHT NOW THERE IS SOMETHING LIKE 21 NAMES THAT ARE WORKING ON THE IPO THE LEADS ARE JP MORGAN AND MORGAN STANLEY SO WHAT'S DEVELOPING HERE IS THAT SMALL INVESTORS MAY NOT BE GETTING ACCESS TO THE SHARES AT LEAST THROUGH SOME OF THESE ONLINE AND OTHER SMALL BROKERS HOWEVER THEY WILL GET ACCESS TO THE SHARES THROUGH OTHER ROUTES SOME OF THE UNDERWRITERS HAVE LARGE RETAIL BROKERAGE FORCES MORGAN STANLEY WITH SMITH BARNEY BEING A GREAT EXAMPLE AND THERE ARE OTHER MEMBERS OF THE SYNDICATES THAT WILL ALSO RECEIVE ALLOCATIONS FOR RETAIL INVESTORS SO THERE IS NOT AS THOUGH THERE ARE NO OPPORTUNITIES HERE BUT THIS IS A VERY POPULAR IPO AT LEAST IT IS SHAPING UP LIKE THAT FROM WHAT I AM HEARING AND THERE IS NOT GOING TO BE ENOUGH AROUND FOR EVERYBODY AND SOME INVESTORS THAT I HAVE TALKED TO ARE VERY FRUSTRATED.

QUICK: HOW DIFFERENT IS THIS FROM OTHER IPOS THAT HAVE BEEN HOT IPOS THAT PEOPLE HAVE WANTED TO GET A HOLD OF IS THIS A DIFFERENT SCENARIO OR IS THIS MORE OF THE SAME?

KELLY: IT IS AND IT ISN'T BECKY I THINK THE DIFFERENCE IS SORT OF THE OPTICS AND SORT OF THE MEMORY OF GM I MEAN IT WAS LESS THAN 2 YEARS AGO THAT TARP MONEY HELPED BAIL OUT A STRUGGLING COMPANY AND I THINK A LOT OF INDIVIDUALS FEEL LIKE HEY MY TAXPAYER MONEY HELPED KEEP THIS INDUSTRY AND CERTAINLY THIS COMPANY AFLOAT I WANT A PIECE OF THE ACTION AND WHEN THEY SAY THAT THEY ARE THINKING ABOUT THE FACT THAT THE SHARE PRICE WE HAVE SEEN IN THE PROSPECTUS IS 26 TO 29 DOLLARS A LOT OF PEOPLE EXPECT IT TO GO HIGHER EVEN IN THE OFFERING PROCESS AND HIGHER IN THE AFTERMARKET SO IN THAT SENSE IT IS ALMOST REMINISCENT OF A TECH IPO

QUICK: BUT I WAS GOING TO SAY IS IT DIFFERENT THEN WHAT WE HAVE SEEN OR THIS IS JUST BEING HELD TO A DIFFERENT STANDARD

KELLY: I THINK IT IS BEING HELD TO A DIFFERENT STANDARD I THINK TYPICALLY SMALL INVESTORS CAN PARTICIPATE IN IPOS BUT NOT ACROSS THE BOARD. TD AMERITRADE AND SCHWAB DO PROVIDE IPOS TO INVESTORS I BELIEVE E*TRADE DOES TOO BUT NOT ALL OF THEM IT KIND OF DEPENDS ON AVAILABILITY AND POPULARITY

QUICK: IT'S USUALLY THE ONES THAT NO ONE WANTS THAT THEY USUALLY GET TO PROVIDE

KELLY: RIGHT AND THIS IS THE OPPOSITE RIGHT

KERNEN: ITS NOT JUST TARP MONEY DO YOU KNOW HOW MANY LONG TIME SHAREHOLDERS WERE OF GM THAT HAS THEIR WALLPAPER NOW PLASTERED WITH THE STOCK

KELLY: GM STOCK CERTIFICATES

KERNEN: GM STOCK CERTIFICATES ARE WORTHLESS I MEAN THAT HURT A LOT OF PEOPLE THAT WERE LONG TIME MY DAD OWNED IT FOR 50 YEARS AND SWORE BY IT AND TO WATCH THAT HAPPEN WAS NOT SO GREAT ALSO WHAT HAPPENED TO SOME OF THE DEBT HOLDERS TOO IN TERMS OF SEEDING MOST OF THEIR STAKE TO THE UNION PROBABLY DOESN'T MAKE PEOPLE THAT HAPPY

GUEST HOST: KATE LET ME ASK YOU A QUESTION ONE OF THE CRUEL IRONIES HERE IS THAT GM BALANCE SHEET IS GREAT NOW WITH ALL THE DEBT AND HERE'S FORD THAT GETS THROUGH THE RECESSION WITHOUT BANKRUPTCY AND IS RECOVERING NICELY WITH A LOT OF DEBT ON ITS BALANCE SHEET GM WHO FAILS HAS ALMOST NO DEBT ON THEIR BALANCE SHEET ISN'T THAT IRONIC THAT IS BASICALLY THE ENTHUSIASM FOR THE STOCK

KELLY: OH YEAH ABSOLUTELY IT IS I MEAN THERE ARE A LOT OF IRONIES HERE AND THAT IS CERTAINLY ONE OF THEM I SHOULD SAY SPEAKING OF DEBT THE DEVIL IS GOING TO BE IN THE DETAILS GOING FORWARD I MEAN THEY STILL HAVE TO DEAL WITH PENSION LIABILITY THEY STILL HAVE TO DEAL WITH UNION NEGOTIATIONS SO IT IS GOING TO BE A CHALLENGE FOR DAN ACKERSON AND OTHER MEMBERS OF THE MANAGEMENT TEAM TO FIGURE OUT HOW TO KEEP THAT FROM HOBBLING THEM IN THE WAY IT DID BEFORE

SORKIN: SO AFTER THIS REPORT TODAY DO WE THINK THAT SOMEONE AT TREASURY IS WATCHING THIS AND ALL OF A SUDDEN JP MORGAN AND MORGAN STANLEY ARE GOING TO GET CALLS SAYING YOU BETTER MAKE DISTRIBUTION TO THESE FOLKS

KELLY: WELL THAT'S A GREAT QUESTION ANDREW AND THEREFORE I WANT TO BE CLEAR AT THIS POINT IN THE PROCESS IT SEEMS TO US THAT THESE BROKERS ARE NOT GETTING ALLOCATIONS BUT THAT CAN CHANGE

QUICK: THESE ARE THE ONLINE BROKERAGES WE'RE NOT SAYING THAT ANY OF THESE OTHER BIG BROKERS ARE NOT MAKING ALLOCATIONS TO SMALLER RETAIL INVESTORS CORRECT?

KELLY: THAT'S RIGHT SO I THINK THERE ARE RETAIL BROKERAGES THAT ARE GETTING ALLOCATIONS AND THEY ARE THE ONES AFFILIATES WITH THE UNDERWRITERS AS WELL AS ANOTHER FEW WHOSE NAMES I DON'T KNOW I DON'T THINK THEY HAVE BEEN RELEASED

QUICK: HOW UNUSUAL WOULD IT BE FOR THOSE THREE ONLINE TRADING COMPANIES TO GET A BIG ALLOCATION

KELLY: TO GET ALLOCATIONS TO BEGIN WITH I THINK IT IS QUITE COMMON THAT THEY GET ALLOCATIONS I THINK THE HOT IPOS ARE HARD FOR ESPECIALLY SMALL INVESTORS TO GET INTO AND THIS IS NO EXCEPTION TO THAT RULE IT JUST HAS A GREATER OPTICAL MEANING BECAUSE IT IS THE US TREASURY THEY DO WANT TO INVOLVE THE SMALL INVESTOR IN THE POTENTIALLY LUCRATIVE EXPERIENCE HERE AFTER BAILING OUT THE COMPANY IN 2008

SORKIN: IT IS JUST SO IRONIC THAT THE GM IPO IS A HOT TICKET ITEM

KERNEN: I KNOW I WAS JUST THINKING THE SAME THING

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