Kerkorian cuts his stake in GM again!
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Kerkorian cuts his stake in GM again!
Let's see if he's contiues this pattern into next year.
Kerkorian selling another 14M GM shares
November 30, 2006: 01:55 PM EST
DETROIT, Nov. 30, 2006 (AFX International Focus) -- Dissident General Motors Corp. (NYSE:GM) shareholder Kirk Kerkorian is selling another 14 million shares in the troubled automaker, dropping his stake by a third to 4.95 percent.
Kerkorian's move disclosed Thursday represents an even larger retreat from his ownership of GM than previous indications.
Kerkorian's investment company, Tracinda Corp., had said last week it was reducing its stake to 42 million shares, or 7.4 percent of the company, from 56 million shares, or 9.9 percent of the company.
In a new filing with the U.S. Securities and Exchange Commission, Tracinda said it had reached agreement on Tuesday to sell another 14 million GM shares at $28.75 each, leaving him with 28 million shares of the automaker.
The latest sale, which would raise a total of $402.5 million, will close on Friday, the filing said.
A message was left with a Tracinda spokeswoman.
GM shares fell 5 cents to $29.45 in afternoon trading on the New York Stock Exchange.
November 30, 2006: 01:55 PM EST
DETROIT, Nov. 30, 2006 (AFX International Focus) -- Dissident General Motors Corp. (NYSE:GM) shareholder Kirk Kerkorian is selling another 14 million shares in the troubled automaker, dropping his stake by a third to 4.95 percent.
Kerkorian's move disclosed Thursday represents an even larger retreat from his ownership of GM than previous indications.
Kerkorian's investment company, Tracinda Corp., had said last week it was reducing its stake to 42 million shares, or 7.4 percent of the company, from 56 million shares, or 9.9 percent of the company.
In a new filing with the U.S. Securities and Exchange Commission, Tracinda said it had reached agreement on Tuesday to sell another 14 million GM shares at $28.75 each, leaving him with 28 million shares of the automaker.
The latest sale, which would raise a total of $402.5 million, will close on Friday, the filing said.
A message was left with a Tracinda spokeswoman.
GM shares fell 5 cents to $29.45 in afternoon trading on the New York Stock Exchange.
Kerkorian cuts GM stake further
Billionaire agrees to sell 14 million shares of the automaker, trimming his holdings to 4.95 percent.
November 30 2006: 1:13 PM EST
DETROIT (Reuters) -- Billionaire Kirk Kerkorian's Tracinda Corp. investment firm on Thursday said it had agreed to sell 14 million shares of General Motors Corp., cutting his stake in the automaker to 4.95 percent from 7.4 percent.
GM (down $0.56 to $28.94, Charts) share slipped over 1 percent in midday trade on the New York Stock Exchange.
In a U.S. regulatory filing, Tracinda said it had agreed to sell the shares in a private transaction for $28.75 a share.
Separately GM completed the sale of a 51-percent stake in finance arm General Motors Acceptance Corp. on Thursday to a consortium of investors led by Cerberus FIM Investors, LLC.
GM expects the deal, which it announced earlier this year, to provide about $14 billion in net cash proceeds over three years.
Billionaire agrees to sell 14 million shares of the automaker, trimming his holdings to 4.95 percent.
November 30 2006: 1:13 PM EST
DETROIT (Reuters) -- Billionaire Kirk Kerkorian's Tracinda Corp. investment firm on Thursday said it had agreed to sell 14 million shares of General Motors Corp., cutting his stake in the automaker to 4.95 percent from 7.4 percent.
GM (down $0.56 to $28.94, Charts) share slipped over 1 percent in midday trade on the New York Stock Exchange.
In a U.S. regulatory filing, Tracinda said it had agreed to sell the shares in a private transaction for $28.75 a share.
Separately GM completed the sale of a 51-percent stake in finance arm General Motors Acceptance Corp. on Thursday to a consortium of investors led by Cerberus FIM Investors, LLC.
GM expects the deal, which it announced earlier this year, to provide about $14 billion in net cash proceeds over three years.
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It's either $30.24 or $26.33 depending on who you believe.
Here's a copy of one of my post from back in October:
Here's some interesting Kerkorians facts from Saturday's Los Angeles Times:
1.) The value of Kerkorians 56 million GM shares decreased by almost 116 million on Fridays decline. Even after that decline Kerkorian has still made 45 million dollars in profit on paper so far.
2.) Kerkorian's acquisition price of GM shares averages out to $30.24, so it would have to fall under that for him to lose money.
3.)Kerkorian teamed up with York in 1995 in an attempt to gain control of Chrysler. Even though his attempt to take over Chrysler failed he held onto his shares until Chrysler was bought by Daimler-Benz and he pocketed a cool 2.7 billion profit.
The 5 theories on Kerkorian from http://www.slate.com/id/2118232/
*** Slate.com and LA times contradict each other on the average acquisition amount for Kerkorians GM shares.
Here's a copy of one of my post from back in October:
Here's some interesting Kerkorians facts from Saturday's Los Angeles Times:
1.) The value of Kerkorians 56 million GM shares decreased by almost 116 million on Fridays decline. Even after that decline Kerkorian has still made 45 million dollars in profit on paper so far.
2.) Kerkorian's acquisition price of GM shares averages out to $30.24, so it would have to fall under that for him to lose money.
3.)Kerkorian teamed up with York in 1995 in an attempt to gain control of Chrysler. Even though his attempt to take over Chrysler failed he held onto his shares until Chrysler was bought by Daimler-Benz and he pocketed a cool 2.7 billion profit.
The 5 theories on Kerkorian from http://www.slate.com/id/2118232/
Theory #1: Kerkorian is a Warren Buffett-esque, long-term, tenacious, empire-building investor, and at age 87, he's seeking one last big triumph. James Cramer thinks Kerkorian is in at GM for the long haul; after all, in the 1990s, he amassed a big stake in another ailing car company—Chrysler—and helped push it to merge with Daimler in 1998. (He's still pursing litigation against DaimlerChrysler over how the merger occured.) Look for Kerkorian to use his leverage to shake up management, engineer a transaction (or series of transactions), and boost shareholder value.
The Problem With This Theory: Kerkorian can't possibly live long enough to turn GM around. Cutting GM's Gordian-knot mess of bull-headed unions, clueless management, and legacy costs is practically impossible. This company is a salvage job, not a fixer-upper. Kerkorian is at an age when he shouldn't buy green bananas.What's in it for GM?
Theory #2: Kerkorian is like a fast-money hedge-fund manager trying to get out from under a bad trade. Look, the guy's ancient. He needs to act quickly. The SEC filing shows that he already owns 22 million shares of GM, purchased at an average price of $26.33 per share. Lots of investors have been shorting GM—borrowing it and then selling it. By making a highly public, way-above-the-market bid, Kerkorian could force many of those shorts to cover and rebuy the stock. As the shorts rushed to cover, they'd propel the price upward and give him the opportunity to make a few quick bucks. Indeed, on Wednesday the stock closed at $32.80.
The Problem With This Theory: It would probably be illegal to do this. Dumping shares after making a tender offer would violate all sorts of securities regulations and cause immense damage to Kerkorian's reputation.
Theory #3: GM CEO Rick Wagoner, who recently took charge of the company's ailing U.S. auto business, may secretly be egging Kerkorian on as a not-so-subtle message to the unions. United Auto Workers, listen up. Kerkorian's tender offer is a sign that he and other outside investors with loads of cash could easily acquire a big stake in the company, or the whole thing, and ram solutions to GM's problems down your throat. So, quit smoking and start negotiating benefit cuts.
The Problem With This Theory: It presumes a degree of foresight and calculation on the part of GM's management that it has, to date, done a very good job of hiding.
Theory #4: This is the first step of an effort by Kerkorian to buy the whole company so he can take it private or sell off its profitable financing pieces and restructure. Merrill Lynch analyst John Casesa said in an article that Kerkorian's interest seems focused on GM's non-auto businesses, such as the financing arm.
The Problem With This Theory: Breaking up is hard to do. GM has $291 billion in debt. No matter how much the company could raise by selling the financial unit, GMAC, it will barely dent the company's liabilities. And it will be difficult for GM to reduce its pension and health-care costs sharply without a trip to Chapter 11, which would render Kerkorian's stock worthless.
Theory #5: Kerkorian's an eccentric, inscrutable billionaire. Kerkorian has built himself from nothing to $8.9 billion. He's got more gumption and energy than people one-third his age. Kerkorian clearly operates on a different level than the rest of us mortals. Time and again, he's found value in businesses where others saw only disaster. Who are we to question his motives?
The Problem With This Theory: There is no problem with this theory.
The Problem With This Theory: Kerkorian can't possibly live long enough to turn GM around. Cutting GM's Gordian-knot mess of bull-headed unions, clueless management, and legacy costs is practically impossible. This company is a salvage job, not a fixer-upper. Kerkorian is at an age when he shouldn't buy green bananas.What's in it for GM?
Theory #2: Kerkorian is like a fast-money hedge-fund manager trying to get out from under a bad trade. Look, the guy's ancient. He needs to act quickly. The SEC filing shows that he already owns 22 million shares of GM, purchased at an average price of $26.33 per share. Lots of investors have been shorting GM—borrowing it and then selling it. By making a highly public, way-above-the-market bid, Kerkorian could force many of those shorts to cover and rebuy the stock. As the shorts rushed to cover, they'd propel the price upward and give him the opportunity to make a few quick bucks. Indeed, on Wednesday the stock closed at $32.80.
The Problem With This Theory: It would probably be illegal to do this. Dumping shares after making a tender offer would violate all sorts of securities regulations and cause immense damage to Kerkorian's reputation.
Theory #3: GM CEO Rick Wagoner, who recently took charge of the company's ailing U.S. auto business, may secretly be egging Kerkorian on as a not-so-subtle message to the unions. United Auto Workers, listen up. Kerkorian's tender offer is a sign that he and other outside investors with loads of cash could easily acquire a big stake in the company, or the whole thing, and ram solutions to GM's problems down your throat. So, quit smoking and start negotiating benefit cuts.
The Problem With This Theory: It presumes a degree of foresight and calculation on the part of GM's management that it has, to date, done a very good job of hiding.
Theory #4: This is the first step of an effort by Kerkorian to buy the whole company so he can take it private or sell off its profitable financing pieces and restructure. Merrill Lynch analyst John Casesa said in an article that Kerkorian's interest seems focused on GM's non-auto businesses, such as the financing arm.
The Problem With This Theory: Breaking up is hard to do. GM has $291 billion in debt. No matter how much the company could raise by selling the financial unit, GMAC, it will barely dent the company's liabilities. And it will be difficult for GM to reduce its pension and health-care costs sharply without a trip to Chapter 11, which would render Kerkorian's stock worthless.
Theory #5: Kerkorian's an eccentric, inscrutable billionaire. Kerkorian has built himself from nothing to $8.9 billion. He's got more gumption and energy than people one-third his age. Kerkorian clearly operates on a different level than the rest of us mortals. Time and again, he's found value in businesses where others saw only disaster. Who are we to question his motives?
The Problem With This Theory: There is no problem with this theory.
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Joined: Nov 2000
Posts: 2,712
From: Ontario
Regarding the Slate article, this statement is misleading at best:
GM has $291 billion in debt. No matter how much the company could raise by selling the financial unit, GMAC, it will barely dent the company's liabilities.
The majority of that debt is GMAC's and is balanced out by the assets they own. If GM sold all of GMAC, +$250B of the debt (and the matching assets) goes with it, so it's pointless to say that "the proceeds from such a sale wouldn't dent the debt" because the debt would go with the sale. IIRC, the debt associated with GM's continuing operation is around $25-30B and all the rest is GMAC's.
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Joined: Dec 1969
Posts: 1,911
From: Southern California (SoCal)
Yep, he's done with GM.
http://www.msnbc.msn.com/id/15971257/
http://www.msnbc.msn.com/id/15971257/
The Wall Street Journal, citing a person familiar with the matter, reported Thursday on its Web site that the billionaire investor sold his entire remaining investment in GM — 28 million shares — at $29.95 a share, a transaction worth more than $800 million. The newspaper reported that the shares were sold to Bank of America, a key lender to Kerkorian.
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