NEW YORK ( TheStreet) -- There has been a lot of hype surrounding auto stocks this year, but investors should think twice about trying to get shares of Chrysler in an IPO.
This week Chrysler and the United Automobile Workers' Voluntary Employee Beneficiary Association filed to sell shares to the public.
I first became publicly bullish about rival automaker Ford (F) roughly 10 months ago, when shares were trading at about $10. Since then, the stock has appreciated more than 40%, not accounting for dividends.
I'm not saying this to boast. I'm just pointing out the sizable returns enjoyed by Ford investors recently. And my investment was "late" if you think about all the folks who bought shares at $2 or $4.Even investors buying at $12 and $13 per share have made decent returns in a relatively short period of time. (GM) may now be looking to book profits while staying in the auto sector. One method they may be considering is selling stakes in Ford and GM and buying shares of Chrysler, if in fact it carries out an IPO. But I'd urge caution for one simple reason: Chrysler has an unusual motive for its IPO. The typical company goes public to raise capital to expand and/or pay down debt.
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