Kerkorian buys more GM shares

[Northstar]

Kerkorian buys more GM shares

By Jason Stein
Automotive News / September 01, 2005

http://www.autonews.com/news.cms?newsId=13214

DETROIT -- Kirk Kerkorian has raised his stake in General Motors.

Kerkorian-controlled companies agreed to buy 13.1 million shares of GM in three separate purchases in August, according to a U.S. Securities and Exchange Commission filing on Thursday.

Kerkorian's companies -- Tracinda Corp. and 250 Rodeo Drive, both of Beverly Hills, Calif. -- now hold 9.53 percent of GM common stock, or almost 54 million shares. That is up from the previous holding of 7.2 percent.

Kerkorian has said in SEC filings that his stake is for investment purposes only. A Tracinda spokesperson repeated that position on Thursday.

"Mr. Kerkorian has made a long-term value-driven investment because he has confidence in the company, the American auto industry and the U.S. economy as a whole," the spokesperson said.

On Aug. 31, Tracinda also entered into a revolving credit line with Bank of America worth more than $400 million, according to the SEC filing. Tracinda borrowed $187 million of that amount for its latest purchases, leaving more than $200 million in credit available.

Kerkorian increased his GM holdings earlier this year, buying about 18.9 million shares in a tender offer that ended June 7. Tracinda sought 28 million shares at that time, which would have brought its stake in GM to 8.9 percent.

[Guest Josh]

The plot thickens. Don't think for one minute he's doing this for "investment purposes." I know his people have had some discussions with our old Buick sales buddy. Nothing significant but still something to keep in mind.

[Newbiewar]

okay I know you neeed to make money in life, but at 83 or however the man is, and gambling with 1.5 billion dollars, how long term can he possibly go? and why? couldnt you just happily live off of 1.5 billon no to mention the rest of the money he has, or is it strickly for capital gains taxes?

[FUTURE_OF_GM]

Kerkorian isn't buying GM shares just because they are a 'good buy' The company has mounting healthcare costs that it cannot continue to fund, an image befitting of someone on death row, ever decreasing market share and market interest with ever INcreasing competition and resentment then to beat all, they're head is tied to the chopping block by a blindly powerful and naive labor union. I like being the GM optimist/fan as much as anyone here, but GM is by no means out of the woods yet. Trust me... He's a business man, he sees an oppotunity and he's executing it. The only variable in the equation is that we haven't figured out WHY he is doing it yet. I dunno, I'm a little nervous about it, but I'm also a little excited about it. The more people we can get to shake things up at GM right now, the better. Especially in the all important image department.

[Newbiewar]

but what the hell is he doing... its just creepy, that he tried to buy Chrysler... what are his ambitions this time? ugg! i'm just scared... i dont want him to get too much ownership, that wouldnt be good... how can GM keep him away from a majority of shares?

[Petra]

My guess: He plans to get control of the company, throw out the current management, and restructure it from the ground up to his liking. Or, failing that, he wants to get enough control to let him do this to a limited degree. It wouldn't be pretty, but I think it would be good for GM.

[4gm]

My bet in on the early speculation that he will eventually try and spin off GMAC. Without GMAC's earnings to prop itself up, GM's NA auto operation will then be forced to deal with the UAW and its legacy costs. The stock price would probably plummet otherwise.

[91z4me]

My bet in on the early speculation that he will eventually try and spin off GMAC.  Without GMAC's earnings to prop itself up, GM's NA auto operation will then be forced to deal with the UAW and its legacy costs.  The stock price would probably plummet otherwise.

[post="8912"]<{POST_SNAPBACK}>[/post]

That is my bet too. He says look guys we get all this profit from the sale and EVERYONE makes money instantly. Then once the sale is complete and he has his money he dumps his shares and GM's stock price goes through the floor. Mark my words this is NOT good.

[capriceman]

i agree this is not good does no body remeber the harm done to DCX! but in short term its good but not long term. does he not see that autos is not the greatest busssines anymore he should inves in small companies that do work for bigger companies.

[Newbiewar]

he could spin off everything... Chevrolet would go for 90% of the price of all of GM, and GMAC could go for a lot... Cadillac could go for a lot with just a bit of work... and so could many of the smaller brands... Thats what some rich people do... they buy corperations and spin everything off... because power windows and power doors costs more then the two packaged together... and on a bigger scale, the whole car costs a lot less then each peice when combined...