GM Shares Fall Amid Drop in Market Share

[Guest Josh]

NEW YORK (AP) - General Motors Corp. shares dropped to their lowest point in more than 15 years Tuesday after a report showed it losing market share to Asian automakers in December and Toyota threatened to at least match GM's production next year.

GM also recalled more than 400,000 vans on Tuesday because of faulty seat belts.

Burnham Securities analyst David Healy suggested the stock's decline -- nearly 4 percent in afternoon trading -- was more likely tied to general pessimism about the automaker's future than any of the day's announcements.

The company's shares were down 75 cents, or 3.6 percent, at $20.30 in afternoon trading on the New York Stock Exchange after hitting a 52-week low of $19.63 earlier, their lowest level since October 1987.

A J.D. Power and Associates report shows GM's U.S. market share fell to 21.7 percent from 22.4 percent as Asian automakers took over some of its share. Meanwhile, Tokyo-based Toyota said it plans to raise output about 10 percent next year, building about 9.1 million vehicles. General Motors, which has said it expects to produce around 9.1 million vehicles for 2005, has recently announced a number of plant closures and job cuts.

"Anyone who was surprised by Toyota's forecast has been living on another planet," Healy said. The Japanese automaker has been steadily gaining strength this year as U.S. automakers have struggled with slow sales of the sport utility vehicles and trucks that drove sales in recent years.

GM said it would recall about 425,000 Chevrolet Express and GMC Savana vans from model years 2003 through 2006 because seat belt buckles in the vehicles do not latch or unlatch. A spokesman said no injuries have been reported from the problem.

GM's stock has slid from a 52-week high of $40.82 in January. Its previous low for the year was $20.60, reached on Nov. 17.

Source: http://news.moneycentral.msn.com/provider/...1220&ID=5340309

[FUTURE_OF_GM]

The plan is working!!! Go Toyota!!! And the anti-Detroit people continue to get exactly what they want! Trying to get those last punches in before Detroit so as to offset the positive news I guess.

[nzr]

Holy crap, that's low. :(

[Northstar]

As long as GM keeps selling the same amount of vehicles they will be fine. In a recent Autonews interview, Wagoner said they'll have the capacity to build 4.2 million vehicles after the plant closings. If there are 16.8 million vehicles sold, then GM will have 25% market share, but if they're 18 million vehicles sold, obviously GM won't have 25% share. On the other hand, if less than 16.8 million vehicles are sold and GM still sells 4.2 million, then GM will have more than 25% share. I don't think GM is so obsessed with market share anymore. All they're trying to do is sell about the same amount of vehicles each year to stay in business.

[Hogans_Heroes]

Yes, the official line throughout the day was a PIN report or Toyota production schedule... but something tells me the $19.31 on the ECN has a little more to do with this: UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 General Motors Corporation -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, par value $1 2/3 per share -------------------------------------------------------------------------------- (Title of Class of Securities) 370442105 -------------------------------------------------------------------------------- (CUSIP Number) Richard Sobelle, Esq. Tracinda Corporation 150 South Rodeo Drive, Suite 250 Beverly Hills, CA 90212 (310) 271-0638 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- CUSIP No. 370442105 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). Tracinda Corporation Item 4. Purpose of Transaction Item 4 of the Schedule 13D is hereby amended to add the following information: On December 15, 2005, and December 19, 2005, Tracinda sold 5,000,000 shares and 7,000,000 shares, respectively, of General Motors common stock in private transactions. Tracinda sold these shares because it is eligible for substantial federal and California corporate income tax savings if it incurs a capital loss prior to the end of its current fiscal year, January 31, 2006. The capital loss will offset certain capital gains realized by Tracinda in an unrelated transaction. The Filing Persons may determine, based on market and general economic conditions, the business affairs and financial condition of General Motors, the market price of its shares and other factors deemed relevant by the Filing Persons, to acquire or dispose of additional shares. In this regard, the Filing Persons may consider acquiring additional shares when they are able to do so without jeopardizing the tax benefits realized as a result of the sales described herein. Except as described above in this Item 4 and herein, the Filing Persons do not have any plans or proposals that relate to or would result in any of the actions or event specified in clauses (a) through (j) of Item 4 of Schedule 13D. Item 5. Interest in Securities of the Issuer Item 5 of the Schedule 13D is hereby amended to add the following information: (a) The following table sets forth information with respect to the shares beneficially owned by each person or entity named in Item 2 hereof. Mr. Kerkorian has sole voting and investment power with respect to the shares held by the Filing Persons: Name -------------------------------------------------------------------------------- Number of Shares -------------------------------------------------------------------------------- Percentage of Outstanding (1) -------------------------------------------------------------------------------- Tracinda Corporation 44,000,000 7.8 % 250 Rodeo, Inc. 7,613,700 1.35 % Kirk Kerkorian 44,000,000 7.8 % Anthony L. Mandekic -0- 0 % -------------------------------------------------------------------------------- (1) Computed on the basis of 565,506,606 shares of common stock issued and outstanding on October 31, 2005, as set forth in General Motors Form 10-Q filed on November 9, 2005 for the period ending September 30, 2005. © On December 15, 2005 Tracinda sold 5,000,000 shares of General Motors common stock for $22.02 per share ($110,100,000 in the aggregate) in a private transaction. On December 19, 2005 Tracinda sold 7,000,000 shares for $20.21 per share ($141,470,000 in the aggregate). -------------------------------------------------------------------------------- SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. December 20, 2005 TRACINDA CORPORATION By: /s/ Anthony L. Mandekic -------------------------------------------------------------------------------- Anthony L. Mandekic Secretary/Treasurer KIRK KERKORIAN By: /s/ Anthony L. Mandekic -------------------------------------------------------------------------------- Anthony L. Mandekic Attorney-on-Fact* 250 RODEO, INC. By: /s/ Anthony L. Mandekic -------------------------------------------------------------------------------- Anthony L. Mandekic Secretary/Treasurer* -------------------------------------------------------------------------------- * Power of Attorney previously filed as Exhibit (i) to Schedule TO/A filed by Tracinda Corporation on May 26, 2005.

[Hogans_Heroes]

This part is important - if for no other reason than it is being misinterpreted in the media at present:

"The Filing Persons may determine, based on market and general economic conditions, the business affairs and financial condition of General Motors, the market price of its shares and other factors deemed relevant by the Filing Persons, to acquire or dispose of additional shares. In this regard, the Filing Persons may consider acquiring additional shares when they are able to do so without jeopardizing the tax benefits realized as a result of the sales described herein."



http://www.fairmark.com/capgain/wash/

http://www.fairmark.com/capgain/wash/ws101.htm

Because of the Wash Sale rule, GM shareholders can expect no support from Kirk for some time to come. Also, I'm not discounting the validity of the stated reason for selling. However it appears that others are. Questions will be raised for sure. Wagoner's "it started out bad and got worse" year has just dimmed further still.

Hopefully, everyone has stayed away from January 2006 calls. I irresponsibly recommended GM call options on another thread, but note I cited Jan-08 and not-yet-available Jan-09's. I'm getting unbelievably hosed. The stock, now yielding over 10%, has got to have the highest yield in the S&P 500.

I expect we'll see this through.

Keep a long-term horizon and, above all else, keep the faith. Edited December 21, 2005 by Hogans_Heroes

[turbo200]

Thanks for the post. They've sold 12 mil of 95.6 mil shares. They still have the option of selling more, and they wanted to recoup some of thier losses in the form of tax. Is the 12 mil a sign of desperation? Will there be more to come? Obviously, Kerkorian's share was helping to boost the overall value of GM shares, but in what other way was he supporting the shareholders, since you said he will no longer be able to support them?

[Hogans_Heroes]

Thanks for the post. They've sold 12 mil of 95.6 mil shares. They still have the option of selling more, and they wanted to recoup some of thier losses in the form of tax. Is the 12 mil a sign of desperation? Will there be more to come? Obviously, Kerkorian's share was helping to boost the overall value of GM shares, but in what other way was he supporting the shareholders, since you said he will no longer be able to support them?

[post="61546"]<{POST_SNAPBACK}>[/post]

Well, he will no longer be able to support the share price by purchasing more shares - for a period of time - lest he fall afoul of the above Wash Sale rule.

Furthermore (and more importantly), although no semblance of the previous floor created by his tender offer still exists, the "threat" that he could make another bold move has figured in the minds of would be short-seller hedge fund types. A lot of them had to lick their wounds pretty good back in May. But now there's a window where they're assured there won't be any similar blockbuster announcements as his hands are tied.

Then, too, with a diminished stake it appears he could have less leverage with the board.

We sure could use some news on the GMAC front, that's for sure!

[evok]

Well, he will no longer be able to support the share price by purchasing more shares - for a period of time - lest he fall afoul of the above Wash Sale rule.

Furthermore (and more importantly), although no semblance of the previous floor created by his tender offer still exists, the "threat" that he could make another bold move has figured in the minds of would be short-seller hedge fund types.  A lot of them had to lick their wounds pretty good back in May.  But now there's a window where they're assured there won't be any similar blockbuster announcements as his hands are tied.

Then, too, with a diminished stake it appears he could have less leverage with the board.

We sure could use some news on the GMAC front, that's for sure!

[post="61549"]<{POST_SNAPBACK}>[/post]

Admittedly I do not know the game as you, but it is most likely that the shares he sold were part of the original June purchase. Priced at app. $31. I believe he has 4 years of tax write off for the loss.

Also, I may be wrong but the IRS tax period ends Dec. 31., I think from my understanding that it may not be an issue for the Wash Rule. Correct me if wrong.

To me this all appears to be meaningless, in the long term. And GM options? To volatile.

Good old Kerkorian, hurt the hedge funds, and shorts first time around! Edited December 21, 2005 by evok

[Newbiewar]

Admittedly I do not know the game as you, but it is most likely that the shares he sold were part of the original June purchase. Priced at app. $31.  I believe he has 4 years of tax write off for the loss.

Also, I may be wrong but the IRS tax period ends Dec. 31., I think from my understanding that it may not be an issue for the Wash Rule.  Correct me if wrong.

To me this all appears to be meaningless, in the long term.  And GM options?  To volatile.

Good old Kerkorian, hurt the hedge funds, and shorts first time around!

[post="61703"]<{POST_SNAPBACK}>[/post]

it appears as he did it for tax reasons... if he doesnt pull out, it isnt a loss... so he pulled out and now he has a loss... purchase at 31 and sell at 19... theres ur loss...

but the other 85 million shares arent considered a loss, just an asset