Filed under: GM, Earnings/Financials
Kerkorian cuts stake in General Motors
Billionaire investor Kirk Kerkorian announced today that his investment firm Tracinda Corp. had cut its stake in General Motors from 9.9% to 7.4% by selling $462 million worth of the automaker's stock. That amounts to a sell off of 14 million shares at $33 per share. The move by Kerkorian comes after the soap opera-like events surrounding a proposed alliance between General Motors and Nissan/Renault that ultimately fell through despite Kerkorian's support. In fact, Kerkorian and the man he placed on GM's board, Jerry York, were the ones who proposed the alliance and approached Nissan/Renault without the board's knowledge. Many postulate that GM CEO Rick Wagoner didn't appreciate the surreptitious move that usurped his power and he therefore made sure the proposal was shot down. A committee chosen by Wagoner was set up to evaluate the alliance and found that the proposed alliance would benefit Nissan/Renault more than it would GM. For its part, Nissan/Renault was unwilling to pay a large sum of money that numbered in the hundreds of millions, which GM proposed would even out the partnership. On account of the failed alliance, Jerry York resigned from GM's board on October 6th.
Who knows what goes on in the mind of Kirk Kerkorian, but knowing what we know about GM's product lineup stretching out through 2010, we'd have to say that selling his stake in the company is a move that will probably lose money in the long run. We're not financial analysts by any means, but GM's turnaround has just started the back nine and will bear fruit in the form of profits before the end of 2008. Or so says our Magic 8-Ball.
[Source: Automotive News]
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Reader Comments (Page 1 of 1)
Chris 2:19PM (11/22/2006)
Good riddance, Kirk! Don't let your loses hit your ass on the way out. GM's got product, it doesn't need the frogs or the japs to fortify their range.
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Alex 2:25PM (11/22/2006)
Agreed, Chris, there will always be enough rednecks in this country to buy GM products.
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Dave T. 2:34PM (11/22/2006)
so did he make money on the stock sale or not?
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Ryan 2:41PM (11/22/2006)
"1. Good riddance, Kirk! Don't let your loses hit your ass on the way out."
-In other news Kirk still holds 7.4% of GM, and motor trend car of the year goes to the TOYOTA CAMRY AND is CNN.com's MOST VIEWED STORY.
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5 watt 2:42PM (11/22/2006)
That explains why the stock is down $4 this week. KK still made a small profit of atleast $30mill on these shares. Plus KK still has enough shares to make a stink every once and a while. Hopefully he will apply pressure, but still let the engineers and designers do there job.
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ctsang 2:43PM (11/22/2006)
Tracinda already owns 22 million GM shares, or just under 4 percent of the stock, bought at an average price of $26.33 in 2005. Do a little math and see how much he made laughing all the way to the bank.
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Richard Warren 2:48PM (11/22/2006)
#3 You bet. I bought at 17 and high change, sold at 34.06. He waited too long----- only sold at 33 Did he make money? You bet
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MC 2:55PM (11/22/2006)
Well, he does still own a mere 7.4%! If he keeps that around, I think he'll profit nicely from any potential turnaround.
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whofan 3:42PM (11/22/2006)
Agreed, Chris, there should be enough true Americans in this country to buy GM products.
"Good riddance, Kirk! Don't let your loses hit your ass on the way out. GM's got product, it doesn't need the frogs or the japs to fortify their range"
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Bill Maher is an Idiot 3:43PM (11/22/2006)
Kerkorian is like Al Davis--once great, now old and senile. This old man is a lost cause.
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Chris 3:58PM (11/22/2006)
Be bullish with GM. If Kirk Kerkorian wants to make an emotional cut-and-run right before GM's big comeback, that's his loss. The comedy ensues when Kerkorian turns around and buys shares of Nissan/Renault.
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LakeVeret 4:16PM (11/22/2006)
His old ugly ass got mad, took his ball and jacks and went home, bye bye monkey boy.
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Andy 4:44PM (11/22/2006)
Kerkorian caused more headaches than solutions. The man is too old and out of his league. I'm not supporting General Motors' current management, but Kerkorian did not offer a likeable alternative.
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Swade 4:58PM (11/22/2006)
Maybe Autoblog should share their magic 8-ball with Robert Farago. He'll be up to Deathwatch #250 by then and still spruiking the same crap that he is now.
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dt 8:10PM (11/22/2006)
Yeah I'm sure this guy is completely financially clueless compared to our local autoblog redneck who uses "cut and run" to describe an investment decision. Yeah, Chris, you're a real fucking genius.
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Timmay 10:58PM (11/22/2006)
Based on what ford has done with its share price, it has gone up about 37% from its low Gm should be a 25 dollar stock. Since gm is doing better I'll give it 20% more still it is a 28 dollar stock at most now with Kirk selling out.
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LaughingTooHard 10:54AM (11/23/2006)
Come now boys play nice. Like most rich ol' boys they get mighty upset when things don't go their way. He is out until he can make more money with GM. Toyota is like Google, it is an emotional stock for the public to hem and haw at. GM has made a LOT of bad decisions but if you think they are done - well you read too many blogs. Keep up on US public sentiment about Japan's sex industry, corruption, aging population, imperialistic military build up and depressed economy. No one cares if Motor Trends thinks the Camry is car of the year. I correct myself, anyone who thinks a Camry is the LAST CAR on the planet they would caught dead in (because the Veyron is a toy to them) cares about Toyota or sales. When the piper comes to ask for payment Toyota's pockets might not be deep enough :) GM is reaping what they sowed and Toyota will too - in one way or another.
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Kerkorian 11:33AM (11/27/2006)
What are you guys talking about. He hardly made anything. Don't forget that he held GM stock for over a year and the price went down now that he sold part of his stake.
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