Kerkorian Sells 12 Million Shares of GM
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% stake in GM, Kerkorian’s Tracinda Corp. said in a filing with the Securities and Exchange Commission on Tuesday. Kerkorian spent about $1.7 billion building a 9.9% 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. on Tuesday stepped up its challenge to GM -- 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 spokeswoman Toni Simonetti and Tracinda spokeswoman Carrie Bloom declined to comment.
Kerkorian was in talks with the automaker this month about putting Jerome York, a Tracinda advisor 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.
“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, Mich.
GM Chief Executive Rick Wagoner last month said GM would close all or part of 12 North American facilities, reduce operations at others 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 a year to advise Wagoner.
