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GMAC 2.0: ALLY Opens Below Its IPO Price

Tyler Durden's picture




 

Another day, another 'failed' IPO. Ally Financial - aka GMAC - that bastion of subprime auto loans and risk management, IPO'd at $25 last night (at the very bottom of the $25 to $28 range) but investors seem to prefer to sell their allocations than pile into this 'bank'. Enabling the Treasury to exit more of its losing proposition (raisng $2.38 billion), ALLY opened well below its IPO price... at $24.25. As a gentle reminder, ALLY filed to go public in March 2011.

 

 

 

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Thu, 04/10/2014 - 09:46 | 4642844 Dr. Engali
Dr. Engali's picture

Yeah, we will see it at zero in the near future. It amazes me that the muppets keep falling for this shit.

Thu, 04/10/2014 - 10:00 | 4642900 mayhem_korner
mayhem_korner's picture

 

 

...but they'll make up for it in volume.

Thu, 04/10/2014 - 10:03 | 4642912 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Maybe the muppets are tired of getting the shaft?

Thu, 04/10/2014 - 10:09 | 4642950 Rainman
Rainman's picture

Ally stock is another dog the Treasury just recently dumped < at an 11% loss to the taxpayer >

http://media.ally.com/2014-01-16-Ally-Statement-on-U-S-Treasury-Sale-of-Ally-Common-Stock

Thu, 04/10/2014 - 13:26 | 4644007 3.7.77
3.7.77's picture

"the U.S. taxpayer has received approximately 89 percent of the investment made in Ally.  This is a very positive outcome for Ally and for the U.S. taxpayer"

Whew, I thought it was a waste, my bad.

Thu, 04/10/2014 - 09:46 | 4642846 Two-bits
Two-bits's picture

The circle jerk is complete.

 

 

Thu, 04/10/2014 - 10:11 | 4642961 Cpl Hicks
Cpl Hicks's picture

Not quite.

That will happen when Hilary is elected in 2016.

Thu, 04/10/2014 - 10:32 | 4643037 Shad_ow
Shad_ow's picture

Might be the easiest money you can make.  Bet on it.

Thu, 04/10/2014 - 09:47 | 4642847 Aknownymouse
Aknownymouse's picture

Every IPO since KING has been a fail. That must mean BTFATH then?

Thu, 04/10/2014 - 09:53 | 4642866 Seasmoke
Seasmoke's picture

But their commercials are very funny. That's all that matters. 

Thu, 04/10/2014 - 09:55 | 4642875 Flying Spaniard
Flying Spaniard's picture

Any shit floats! 

Thu, 04/10/2014 - 10:01 | 4642902 Billy Sol Estes
Billy Sol Estes's picture

ALLY, the faceless bank. So when the SHTF you have no one to blame but yourself....

We are a branch-free bank.

Ally doesn't have expensive physical locations, which makes it easier for us to offer:

  • Competitive rates
  • No hidden fees
  • 24/7 live customer care
  • No ATM fees at any ATM nationwide

When you choose Ally, you can bank by phone, chat, or using your computer or mobile device. And you have the freedom to monitor and move your money anytime, anywhere.

 

Thu, 04/10/2014 - 10:10 | 4642945 Colonel Klink
Colonel Klink's picture

Yep, and even more inability to withdraw your funds should adverse events happen.  I guess an Ally/GMAC bank run would consist of people waiting on their phones and sitting in front of their computers.

EDIT:  And I love their 1984-esq name of Ally, because they sure as shit aren't yours.

Thu, 04/10/2014 - 10:53 | 4643148 Billy Sol Estes
Billy Sol Estes's picture

I never caught on to that. I guess we should expect to see more banks with names like "NotYourEnemey Around the Corner Bank" since Ally was already taken and "Bank of People You Can Trust" doesn't exactly instill confidence.

Thu, 04/10/2014 - 10:49 | 4643089 Kilgore Trout
Kilgore Trout's picture

In case anyone's asking, I keep my gold in their safe deposit boxes.

Thu, 04/10/2014 - 10:06 | 4642932 Colonel Klink
Colonel Klink's picture

Quick, time for the Fed to buy the shit out of their shares to give the illusion of success.

Thu, 04/10/2014 - 10:11 | 4642957 swmnguy
swmnguy's picture

The only reason for anybody to buy this piece of crap is that they're anticipating the inevitable bailout as the privatization of the Treasury continues.  We can call it "Ally Bank" or whatever today, but to me it's still GMAC ResCap, which was one of the most absurd contributors to the bond-market looting frenzy we call the housing bubble collapse.

Thu, 04/10/2014 - 10:12 | 4642962 Colonel Klink
Colonel Klink's picture

And don't forget subprime auto loans!

Thu, 04/10/2014 - 10:30 | 4643028 Almost Solvent
Almost Solvent's picture

I work in the BK world I have never seen more 84 month 19.99% used auto loans from anyone other than ALLY.

 

Even Credit Acceptance limits most of their subprime shit to 72 months or less.

Thu, 04/10/2014 - 10:34 | 4643053 Colonel Klink
Colonel Klink's picture

20+ years of working in mortgage and consumer credit world myself.  Shit is crazy.  Glad I left it 4 years ago.

Thu, 04/10/2014 - 11:21 | 4643319 Almost Solvent
Almost Solvent's picture

My favorite was the guy years ago who thought it would be a great idea to take about $10k out of his retirement (net was less taxes + 10% early penalty) so he could payoff his 8 year old used car so that the lender didn't repo it (he was about 3 payments late when he came up with this brillant idea). The car, of course, was worth about half of what he owed on it becasue he had rolled a prior unpaid car loan into this one.

 

So, he pays the $8k to get a car worth maybe $4k at the time. Negative equity is such a lovely thing when the monthly payment is all that maters to someone.  

Thu, 04/10/2014 - 11:19 | 4643311 swmnguy
swmnguy's picture

Jesus Christ.  84 months at 19.99% for a used car?  7 bleeping years?!?!?!?

You know, I grew up poor.  And my parents aren't just financial morons, they're utterly financially incompetent.  We were on welfare because my parents couldn't figure out that $500 on the first of the month and everything's golden, but that same $500 on the 11th of the month, and you're in the shitter.  So I had to learn that fundamental concept on my own, in my late teens.

When you don't have any fucking money, you have to live by your wits.  I bought a new car 6 years ago, for the first time.  The car before that was $7,000.  Prior to that, I never spent more than $2,000 cash on a car.  Yes, they were pieces of shit.  No, they didn't work very well or for very long.  But do you know how much I spent on monthly payments?  As much as I could afford.  That would be...[envelope please]...$0.

I've always observed that it takes a certain set of skills to get and stay rich.  It takes a different, but no less specific, set of skills to survive while being poor.  Actually, that's a skill set of vastly more relevance to most people.

And it's a skill set that precludes signing your name on a loan for 7 years at 19.99% for a god-damned used car.

Sometimes stuff like this makes me angry and depressed.  At other times though I find it encouraging for my own personal prospects.  If you and another guy are running from a bear, you don't have to outrun the bear; just outrun the other guy.  If all you have to do to succeed is not be the guy who indentures himself to a used car for 7 years at 19.99%, I'd say I and my family are going to be OK.

But the last god-damned thing I'm gonna do is invest in the people holding that note.  There; that's one decision where the rich-man skillset and the poor-man skillset indicate the same thing.

Thu, 04/10/2014 - 11:30 | 4643371 Almost Solvent
Almost Solvent's picture

See my comment immediately above.

 

People that don't have any financial sense (and the public schools sure as shit don't teach it) look at the monthly payment only. It's all they can go by.

 

And the car salesman knows it, and can "roll in" negative equity from their current vehicle. "Sign and drive" "Payoff your old car no matter what you owe" - the slogans are a sick joke in one sense.

 

The salesman can make the transaction look anyway they need to get the person to sign on the line for a monthly payment they 'THINK' can afford (even if it's 84 months!!). The trade in is underwater? Just jack up with trade in allowance to zero out (on paper) the negative equity, but jump up the price of the vehicle (and extended warranty and undercoating and 'free' tires for life) to cover the negative equity. On paper, looks great. In reality, you just got yourself into a 6-7 year monthly payment.

 

If you don't negotiate the vehicle price first and without talking about any trade in, then you already lost.

Thu, 04/10/2014 - 11:32 | 4643407 swmnguy
swmnguy's picture

Un-be-flippin'-lievable.  I know you're right.

Just as a side-note, every couple of years the local school district here in Minneapolis tries to institute a unit on personal finance.  It gets shot down every time--by the Chamber of Commerce.  They claim all the anarchist hippies who teach school would teach kids not to trust bankers.

Well, umm, yeah.

Thu, 04/10/2014 - 10:07 | 4642939 alangreedspank
alangreedspank's picture

Hungry Hungry IPOs!

Thu, 04/10/2014 - 10:10 | 4642956 Two-bits
Two-bits's picture

...pump 'em up and let 'em go!

Thu, 04/10/2014 - 10:55 | 4643159 Billy Sol Estes
Billy Sol Estes's picture

http://dealbook.nytimes.com/2014/04/09/ally-prices-its-i-p-o-at-25-a-sha...

Government washing hands before/after flushing.

Thu, 04/10/2014 - 11:01 | 4643191 alangreedspank
alangreedspank's picture

2.4 billions profit ? For the Feds, this is a drop in the bucket. I'm sure they are doing it from the profit and not to wash their hands as you say.

Government taking parts in pump and dump IPO schemes, can't get worse.

Thu, 04/10/2014 - 10:09 | 4642946 Ban KKiller
Ban KKiller's picture

Criminal outfit selling shares of corruption. 

Hedge funds will be big buyers to immediately sell to Muppets. There, all fixed, nothing to see here.

Thu, 04/10/2014 - 10:10 | 4642954 Rising Sun
Rising Sun's picture

The drop in IPO?  Insiders selling.

 

The climb in share price?  That's the fucking cunt Yellen buying up everything she fucking can so insiders can exit.

 

Isn't that right Yellen you miserable bitch????

Thu, 04/10/2014 - 10:26 | 4643006 TalkToLind
TalkToLind's picture

.

Thu, 04/10/2014 - 10:12 | 4642963 NOZZLE
NOZZLE's picture

ALLLIES Bonk should open a subsidiary that sells nothing but tacos burritos and other peasant food and call it Chipotle.

What happens in 26 months when all of the $198 a month leased cars they used to plump car sales start getting dumped back on dealer lots?

Thu, 04/10/2014 - 10:26 | 4643014 TalkToLind
TalkToLind's picture

An extra-frugal MoFo like me will wait for those off-lease vehicles and buy one for many thousands of dollars less than new.  Only not GM vehicles though...Fuck GM.

Thu, 04/10/2014 - 10:13 | 4642966 J Pancreas
J Pancreas's picture

Simply amazing anyone in their right mind would buy this dog. But when you're tied at the hip with a .gov automaker (whose Corvette assemblers voted to go on strike - thanks UAW) the rectal stains in the headquarters might as well suck that tit till it gets bailed out again. What a corrupt country.

Thu, 04/10/2014 - 10:15 | 4642971 TalkToLind
TalkToLind's picture

Would you like a pony, bitchez?

Thu, 04/10/2014 - 10:18 | 4642976 Disenchanted
Disenchanted's picture

Only if it's one of those ponies with that cool single horn sticking out of it's forehead.

Thu, 04/10/2014 - 10:26 | 4643015 F.A. Hayek
F.A. Hayek's picture

'Netbank' 2.0

Thu, 04/10/2014 - 10:43 | 4643086 adr
adr's picture

All heil the Market!

Where bankrupt corporations can make insiders wealthy. Where profit isn't made off commerce, but by the stroke of an accountant's pen. Where money isn't earned, but gifted from a quasi government supported private banking cartel.

HEIL MONEYCHANGERS!

Thu, 04/10/2014 - 11:22 | 4643328 justsayin2u
justsayin2u's picture

Ally now accepts EBT so it's all good.

Thu, 04/10/2014 - 11:30 | 4643392 buzzsaw99
buzzsaw99's picture

calpers will buy it, they'll buy anything

Thu, 04/10/2014 - 12:56 | 4643897 omi
omi's picture

I'll be the contrarian and say buy this on an SP upswing. 

So right now, SP is having a pronounced downleg, wait until it ends, and on the next start of leg up may buy this. If there's action behind ALLY, it should levitate faster than the index.

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