DaFace
12-01-2006, 10:48 AM
http://money.cnn.com/2006/12/01/news/companies/kerkorian_gm/index.htm?postversion=2006120106
Kerkorian unloads all GM shares
Automaker's No. 1 individual shareholder sells all his shares, according to Wall Street Journal, effectively conceding defeat in turnaround efforts.
By Chris Isidore, CNNMoney.com senior writer
December 1 2006: 6:56 AM EST
NEW YORK (CNNMoney.com) -- Billionaire investor Kirk Kerkorian said Thursday he sold another 14 million shares of General Motors, and published reports Friday indicate that soon after that announcement he unloaded his entire stake in the company.
Shares of GM (down $0.27 to $29.23, Charts), which had been higher before the first sale was revealed in an SEC filing, fell sharply afterwards, then rebounded to be little changed in mid-afternoon trading. The stock closed 0.9 percent lower from its open Thursday and was trading nearly 2 percent lower in Frankfurt overnight.
Kerkorian, who recently became GM's largest individual investor with a 9.9 percent stake, sold his last 28 million shares Thursday, according to a person close to the matter, said The Wall Street Journal.
The paper said that the exit meant one less threat to the job of GM's CEO Rick Wagoner, who Kerkorian had criticized for addressing deep-seated money problems too slowly.
GM stock was higher earlier Thursday on news that the automaker had completed its previously announced sale of 51 percent of its General Motors Acceptance Corp. finance unit to a group of buyers led by Cerberus FIM Investors. GM expects the deal to provide about $14 billion in net cash proceeds over three years. But it will also remove a significant source of income for the struggling automaker.
The filing by Tracinda, Kerkorian's investment firm, said it had sold the shares for $28.75 each Tuesday, which was about 4 percent below the stock's low for the day. It's also 13 percent below the price of his previous sale of 14 million shares, and unlike his previous sale is for less than the average $30.22 a share he had paid for his 56 million-share stake.
Shares of GM have tumbled about 19 percent since Nov. 17, the day before Kerkorian started dumping shares. But it's still the best performer of the 30 stocks in the Dow industrials this year, up about 50 percent year-to-date.
Kerkorian's filing did not give any reason for the sale and a spokeswoman said he had no comment beyond the filing.
On the day the previous sale was disclosed, Kerkorian filed a tender offer to increase his stake in casino operator MGM Mirage (Charts), of which he was already the majority shareholder. He offered what was then a 12 percent premium to buy an additional 15 million shares, an offer that would cost him $825 million. The two GM sales announced this month are worth about $865 million.
GM spokeswoman Gina Proia had limited comment on the filing, saying only, "It's our practice not to speculate on the motivations, actions or potential actions of shareholders."
He has been critical of GM management for some time, even as his filings spoke of a desire to increase his holdings. He battled with management of GM, pushing it to join an alliance with Japanese automaker Nissan (Charts) and French automaker Renault, which already have cross-ownership of each other's shares.
After holding almost three months of talks, GM management pulled out of the discussions, saying the automaker would have to be compensated for joining such an alliance.
The move brought criticism from Kerkorian and the resignation of Kerkorian adviser, Jerry York, from the GM board. York, in a letter to GM Chairman and CEO Rick Wagoner, said he had, "grave reservations concerning the ability of the company's current business model to successfully compete with those of Asian producers."
GM, Ford (Charts) and the Chrysler Group unit of DaimlerChrysler (Charts) are all losing money on their core North American automotive operations, and have been losing U.S. market share to Japanese competitors such as Toyota Motor (Charts), as well as Korean and some European automakers.
Kerkorian unloads all GM shares
Automaker's No. 1 individual shareholder sells all his shares, according to Wall Street Journal, effectively conceding defeat in turnaround efforts.
By Chris Isidore, CNNMoney.com senior writer
December 1 2006: 6:56 AM EST
NEW YORK (CNNMoney.com) -- Billionaire investor Kirk Kerkorian said Thursday he sold another 14 million shares of General Motors, and published reports Friday indicate that soon after that announcement he unloaded his entire stake in the company.
Shares of GM (down $0.27 to $29.23, Charts), which had been higher before the first sale was revealed in an SEC filing, fell sharply afterwards, then rebounded to be little changed in mid-afternoon trading. The stock closed 0.9 percent lower from its open Thursday and was trading nearly 2 percent lower in Frankfurt overnight.
Kerkorian, who recently became GM's largest individual investor with a 9.9 percent stake, sold his last 28 million shares Thursday, according to a person close to the matter, said The Wall Street Journal.
The paper said that the exit meant one less threat to the job of GM's CEO Rick Wagoner, who Kerkorian had criticized for addressing deep-seated money problems too slowly.
GM stock was higher earlier Thursday on news that the automaker had completed its previously announced sale of 51 percent of its General Motors Acceptance Corp. finance unit to a group of buyers led by Cerberus FIM Investors. GM expects the deal to provide about $14 billion in net cash proceeds over three years. But it will also remove a significant source of income for the struggling automaker.
The filing by Tracinda, Kerkorian's investment firm, said it had sold the shares for $28.75 each Tuesday, which was about 4 percent below the stock's low for the day. It's also 13 percent below the price of his previous sale of 14 million shares, and unlike his previous sale is for less than the average $30.22 a share he had paid for his 56 million-share stake.
Shares of GM have tumbled about 19 percent since Nov. 17, the day before Kerkorian started dumping shares. But it's still the best performer of the 30 stocks in the Dow industrials this year, up about 50 percent year-to-date.
Kerkorian's filing did not give any reason for the sale and a spokeswoman said he had no comment beyond the filing.
On the day the previous sale was disclosed, Kerkorian filed a tender offer to increase his stake in casino operator MGM Mirage (Charts), of which he was already the majority shareholder. He offered what was then a 12 percent premium to buy an additional 15 million shares, an offer that would cost him $825 million. The two GM sales announced this month are worth about $865 million.
GM spokeswoman Gina Proia had limited comment on the filing, saying only, "It's our practice not to speculate on the motivations, actions or potential actions of shareholders."
He has been critical of GM management for some time, even as his filings spoke of a desire to increase his holdings. He battled with management of GM, pushing it to join an alliance with Japanese automaker Nissan (Charts) and French automaker Renault, which already have cross-ownership of each other's shares.
After holding almost three months of talks, GM management pulled out of the discussions, saying the automaker would have to be compensated for joining such an alliance.
The move brought criticism from Kerkorian and the resignation of Kerkorian adviser, Jerry York, from the GM board. York, in a letter to GM Chairman and CEO Rick Wagoner, said he had, "grave reservations concerning the ability of the company's current business model to successfully compete with those of Asian producers."
GM, Ford (Charts) and the Chrysler Group unit of DaimlerChrysler (Charts) are all losing money on their core North American automotive operations, and have been losing U.S. market share to Japanese competitors such as Toyota Motor (Charts), as well as Korean and some European automakers.