Today's GM order size...
- Thread starter Enfinity
- Start date
at 6.7mm shares traded two hours into the day.
Kerkorian Sells 12 Mln GM Shares, Cuts Stake to 7.8% (Update2)
Dec. 20 (Bloomberg) -- Billionaire investor Kirk Kerkorian, General Motors Corp.'s third-biggest shareholder, sold 12 million shares of the automaker's stock after his stake lost one-third of its value.
The sales, on Dec. 15 and Dec. 19, left the investor with a 7.8 percent stake in GM, Kerkorian's Tracinda Corp. said in a filing with the U.S. Securities and Exchange Commission today. Kerkorian spent about $1.7 billion building a 9.9 percent interest in GM from April to October.
GM shares have lost half their value this year and have dropped to their lowest levels since 1982. The company has had four straight quarters of losses, and its U.S. market share has fallen to eight-decade lows. Toyota Motor Corp. today stepped up its challenge of GM as the world's biggest automaker by boosting its global sales forecast for 2006.
``Kerkorian is betting the stock is going lower and may not recover for some time,'' said Eugene Jennings, a business professor emeritus at Michigan State University. ``He's probably very smart to minimize his losses in the face of a board of directors that doesn't know how to manage a crisis.''
GM shares fell $1.20, or 5.7 percent, to $19.85 at 4:16 p.m. in New York Stock Exchange composite trading, before Kerkorian's announcement. The shares fell to $19.35 at 6:48 p.m. in after-hours trading.
GM spokeswoman Toni Simonetti and Tracinda spokeswoman Carrie Bloom declined to comment.
Board Talks
Kerkorian was in talks with the automaker earlier this month over putting Jerome York, a Tracinda adviser and former Chrysler Corp. chief financial officer, on the GM board. The two sides said Dec. 9 that they didn't reach an agreement.
A board seat for York would have placed Kerkorian, the leader of a failed hostile bid for Chrysler a decade ago, in a position to influence GM's management. GM shares are down more than 70 percent since Chief Executive Officer Rick Wagoner took over in June 2000.
``I had thought Kerkorian was in it for a longer period and really had based his estimates of value on the longer-term rather than the short term,'' said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Michigan.
Wagoner last month said GM will close 12 North American facilities, reduce operations at several more and trim 30,000 factory jobs by 2008 as it tries to end its longest string of quarterly losses in 13 years. GM's board on Dec. 6 approved a plan to bring GM Europe chief Fritz Henderson to the U.S. to replace Chief Financial Officer John Devine, who will stay on another year to advise Wagoner.
``Kerkorian and the board have both underestimated the challenge of resetting GM onto a profitable track,'' Jennings said. ``They both miscalculated.''
To contact the reporters on this story:
Michael Nol in New York at mnol@bloomberg.net
John Lippert in Southfield, Michigan, at jlippert@bloomberg.net
Dec. 20 (Bloomberg) -- Billionaire investor Kirk Kerkorian, General Motors Corp.'s third-biggest shareholder, sold 12 million shares of the automaker's stock after his stake lost one-third of its value.
The sales, on Dec. 15 and Dec. 19, left the investor with a 7.8 percent stake in GM, Kerkorian's Tracinda Corp. said in a filing with the U.S. Securities and Exchange Commission today. Kerkorian spent about $1.7 billion building a 9.9 percent interest in GM from April to October.
GM shares have lost half their value this year and have dropped to their lowest levels since 1982. The company has had four straight quarters of losses, and its U.S. market share has fallen to eight-decade lows. Toyota Motor Corp. today stepped up its challenge of GM as the world's biggest automaker by boosting its global sales forecast for 2006.
``Kerkorian is betting the stock is going lower and may not recover for some time,'' said Eugene Jennings, a business professor emeritus at Michigan State University. ``He's probably very smart to minimize his losses in the face of a board of directors that doesn't know how to manage a crisis.''
GM shares fell $1.20, or 5.7 percent, to $19.85 at 4:16 p.m. in New York Stock Exchange composite trading, before Kerkorian's announcement. The shares fell to $19.35 at 6:48 p.m. in after-hours trading.
GM spokeswoman Toni Simonetti and Tracinda spokeswoman Carrie Bloom declined to comment.
Board Talks
Kerkorian was in talks with the automaker earlier this month over putting Jerome York, a Tracinda adviser and former Chrysler Corp. chief financial officer, on the GM board. The two sides said Dec. 9 that they didn't reach an agreement.
A board seat for York would have placed Kerkorian, the leader of a failed hostile bid for Chrysler a decade ago, in a position to influence GM's management. GM shares are down more than 70 percent since Chief Executive Officer Rick Wagoner took over in June 2000.
``I had thought Kerkorian was in it for a longer period and really had based his estimates of value on the longer-term rather than the short term,'' said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Michigan.
Wagoner last month said GM will close 12 North American facilities, reduce operations at several more and trim 30,000 factory jobs by 2008 as it tries to end its longest string of quarterly losses in 13 years. GM's board on Dec. 6 approved a plan to bring GM Europe chief Fritz Henderson to the U.S. to replace Chief Financial Officer John Devine, who will stay on another year to advise Wagoner.
``Kerkorian and the board have both underestimated the challenge of resetting GM onto a profitable track,'' Jennings said. ``They both miscalculated.''
To contact the reporters on this story:
Michael Nol in New York at mnol@bloomberg.net
John Lippert in Southfield, Michigan, at jlippert@bloomberg.net
imo the unions are killing GM. Except for bankruptcy there is no way GM will be able to wiggle out of the excessive benefit packages and retirement plans. This is a two fold problem for GM. Financing the excessive health care plans and retirement benis for it's union workers means less money available to spend on innovative deisgns that will sell (well not that they've had anyone with a innovative brain in there for decades). Also they need someone like Carlos Ghosn who turned around Nissan to come in and replace the old foggies in there who still think they dominate the automotive world. Providing 0% financing of autos sold at cost is a recipe for disaster, especially when variable rates have gone up. (how the heck are they financing those loans anyway? how are they hedged, anyone know? )
If I were Kerkorian, I'd be buying GM bonds hands over fist instead of the common stock and just push the whole thing into bankruptcy. Once restructured, Strip out non-core assets, close down old plants and restructure union benifits tied into productivity growth and sales growth. I dont follow GM much, but I think at this point GMAC is worth more than GM itself. If bankruptcy restructuring fails, bond holders could spin off GMAC along with much of it's foreign assets and recoup their investment and more. But that depends on paying off its creditors first.
Yes, and it was even smarter to invest in a stock with a truly severe downtrend; or wasn't it???? Excellent, you stupid professors!!
