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Updated to comments from Scottrade.



) -- The little guy appears to be losing out on the General Motors initial public offering.

Trading shops like


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TD Ameritrade

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Charles Schwab

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aren't getting access to the GM public offering, expected to occur next week. Despite 35 underwriters and at least 365 million shares, there isn't enough to distribute to online brokers that cater to small, retail investors.

"We're not participating in the GM IPO because the underwriters we normally work with were very low on the priority list and we wouldn't have been able to get an adequate allotment of shares," Schwab spokeswoman Sarah Bulgatz said in response to questions from


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. "Some IPOs we get, others we don't. It just depends often on how much is available and who the underwriters are and what kind of retail distribution they have."

According to Scottrade, customers can begin trading as soon as stocks are available on the market. As for now, traders can place limit and stop limit orders in advance of the IPO and up to the day of the offering. After the IPO hits the market, all normal online order entries will be automatically enabled.

Similarly, a TD spokeswoman said the company would not be participating either because "we have been informed that we will not receive an allocation of shares." E*Trade was reportedly left out as well.

One reader indicated that Fidelity, which has an online brokerage, was apparently allowing customers to invest in the IPO -- but with an important caveat: A minimum of $500,000 in assets must be invested with the firm. The commenter said it represented "more proof that the small investor is being left out." A spokesman said the GM IPO is listed on its site because the company has a "strategic relationship" with Deutsche Bank

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, which is one of the underwriters on the IPO.

But even wealthy individuals are being shut out, according to Rob Nicholls. He is considered a "preferred investor" with TD Ameritrade because he has over $1 million invested with the brokerage. Yet Nicholls says he can't acquire any GM stock as part of the IPO, either at TD or his other account at Schwab.

"To say I was livid would be an understatement," Nicholls wrote in an email. He plans to contact some associates in London who have access to allocations.

Their exclusion from GM's offering stands out because the company received more than $50 billion in bailout funds from taxpayers, just $7 billion of which have been returned, according to



That figure doesn't include $16 billion in additional aid to GM's one-time financial unit, GMAC (now known as Ally Financial); or $290 million provided to GM Supplier Receivables; or $1.5 billion in incentives committed to GMAC Mortgage for working out troubled borrowers' debt. While those companies are no longer housed within GM, they originated there, contributed to its financial woes and received taxpayer assistance, too.

Many taxpayers could get access to the deal without even knowing it, via their mutual funds or retirement plans run at an arm's length by giant brokerages. But those who want a piece of the action by actively investing online will get shut out. The news brought a mixed reaction from potential retail investors.

Some couldn't fathom why anyone would want to invest in GM. The retail bears noted that it's a company just exiting bankruptcy after a long period of financial stress -- marked by management incompetence and slack demand for their products even as foreign competitors thrived.

"Retail Investors should consider themselves lucky to be excluded," a commenter dubbed CRTollemache posted on


Web site. "This company will soon be bankrupt AGAIN," he added, with a negative review of the upcoming Chevy Volt model.

Another reader named John Everett emailed to say he's "willing to be the first on the list of investors to NEVER buy GM common stock if excluded from the IPO."

But others were disappointed to hear they were unable to participate. They were also frustrated that GM's No. 1 shareholder -- the federal government, which owns a 61% stake in the automaker -- didn't step in to demand that average shareholders be able to buy into the IPO. One of them, William Finn, said in an email message that he was "upset" to hear the news.

"I was set for months ahead of time with the notion that I would be able to participate bidding for shares of the GM IPO," Finn wrote. "This is a good way for me to look upon our government with no regard for taxpayers and individual investors. The Treasury Department should have made sure shares would be allocated for the common man directly upon the release of the IPO."

Morgan Stanley

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JPMorgan Chase

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are the lead underwriters of GM's IPO, which is taking place 17 months after the company declared bankruptcy in June 2009. Beneath those two lead bookrunners, though are a host of other investment firms selling shares in the market, according to a securities filing on Nov. 10.

They range from giant U.S. financial institutions, such as

Bank of America-Merrill Lynch

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Goldman Sachs

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to big banks overseas like


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Itaú Unibanco

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Royal Bank of Canada


. It also includes relatively tiny shops, such as Muriel Siebert's eponymous brokerage firm.

GM's IPO is widely expected to price above the $26 to $29 range outlined in its offering documents. It's a sad irony for average U.S. investors that hedge funds, institutional giants and sovereign wealth funds are getting priority treatment while they're getting left in the dust.

As one laid-off Schwab customer named Anand Marphatia told


, which first reported retail brokers' exclusion: "I really like the GM IPO, I think it's going to do well...I'd like to get in, and I can't."

-- Written by Lauren Tara LaCapra in New York


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Lauren Tara LaCapra


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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.