Banks Don't Make Bank in GM IPO

You would expect the investment banks underwriting the largest IPO in U.S. history to enjoy the largest payday in IPO history, right?

Wrong. From the Times: "The underwriters [of GM's IPO], a huge group led by Morgan Stanley and JPMorgan Chase, with Bank of America and Citigroup also playing major roles, will not receive a big payday from the offering. The lead underwriters are set to receive roughly a fee of 0.75 percent, low by bankers’ standards, according to people with knowledge of the matter."

You see, the largest IPO in history is being offered by a company majority-owned by the U.S. government (and thus the U.S. taxpayers) and so a lower fee was offered (jammed down the throats of) the underwriting banks to allay any further negative press about the U.S. government puttting money into Wall Street bankers' back pockets.

Also, to that end, you'll notice that one bank in particular was conspiciously left out of the group of firms chosen to help price and distribute General Motors' new shares: Goldman Sachs.