GM IPO lead underwriter decision coming soon? Goldman Sachs to be passed over?

May 31, 2010 | By Jim Kim

Bloomberg reports that the U.S. Treasury and General Motors (General Motors news) may choose a lead underwriter for the automaker's widely anticipated initial public offering as soon as this week.

GM, which is more than 60 percent owned by the government, would like to sell shares to the public this year. To do so, it probably needs to make a lead underwriter decision soon. This month, all the bulge bracket-type firms have been in Washington, making their case to be the top underwriter for an IPO (IPO news) that is expected to be massive. The last bakeoff that attracted this much attention was the bakeoff for the rights to sell stock in Google (Google news).

A lot is on the line for Treasury. It has about $40 billion of its $50 billion investment in GM tied up in the company's equity. The would-be underwriters have brought their top dogs to Washington to make their pitches. The exception was Lloyd Blankfein (Lloyd Blankfein news), who may have decided it would have done more good for him to stay away. You would have to wonder if the controversy over Goldman Sachs (NYSE: GS) will play into this decision. You'd imagine quite a firestorm if it is chosen. My sense is that Goldman Sachs will be passed over.

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