|View Poll Results: Is Kirk Kerkorian helping or hurting GM's turnaround|
|Helping GM's Turnaround||0||0%|
|Hurting GM's Turnaround||8||100.00%|
|Voters: 8. You may not vote on this poll|
|10-09-2006, 06:56 PM||#1|
BIO: Kirk Kerkorian
October 7, 2006
AGE: 89. TITLE: Self-made billionaire. Cochairman, president and CEO of Tracinda Corp., a Beverly Hills, Calif.-based company named for his daughters, Tracy and Linda. Tracinda is the majority owner of casino and hotel operator MGM Mirage.
NET WORTH: $9 billion
ACCOMPLISHMENTS: Born in Fresno, Calif., to Armenian immigrants. Flew planes across Atlantic during World War II. First fortune: Sold Trans International Airlines for $104-million profit in the 1960s, invested proceeds in Las Vegas; acquired Flamingo Hotel in 1967. Has been in the hotel and casino business ever since. His MGM Mirage owns more than half the hotel rooms on the Las Vegas Strip.
EDUCATION: High school diploma.
HOMETOWN: Los Angeles.
PERSONAL: Two children, three divorces.
Source: Forbes.com, Hoovers Inc. and Free Press research
|10-09-2006, 07:05 PM||#2|
Here is some articles to help you decide.
|10-09-2006, 09:12 PM||#3|
White 'n Nerdy
Drives: 2017 Camaro 2SS 6MT
Join Date: Aug 2006
Location: Cleveland, Ohio
This guy is going to kill GM if he doesn't either shut the F up or die. The last thing GM needs is greedy stock holders exploiting their weak market position for their own benefit, without looking at the future and big picture. Yes, GM is still rather weak. They are in the midst of finnishing off final runs of many pre-Bob Lutz era designs that are pretty bad or sub-par quality (Monte Carlo, Grand Prix, Rendezvous) which is still hurting GM, while at the same time just starting to roll out all the new Lutz models (Sky, Aura, Solstice, and soon our beloved Camaro) which are going to really help the company. GM has many more great cars in the pipeline over the next few years (G8, RWD Impala, redesigned CTS) that are just going to be the best GM has ever produced. Its obvious Kevorkian isn't looking to the future. I think even GM anticipated this transitional period to be tough. Restructuring the company, buyouts, and closing old plants while opening new ones are all pieces of the renessance of GM. It's what they need to do, and they are doing it. You just can't make 20 years of bad cars and worse company management go away in 20 days. Kerkorian is nothing but a greedy old bastard, and instead of sticking his nose in GM he should be living his days out at the Shady Tree nursing home.
|10-10-2006, 02:34 AM||#4|
Drives: 2014 ZL1 #705
Join Date: Jul 2006
Location: SA, Texas
GM just had 4 vehicles place in the consumers satisfaction survey. I'd say GM is doing just fine. Then we have the upcoming release of the Camaro = big sales for GM. Redesign of a few more vehicles = more income. Presently waiting on patent for diesel powered 350 V8 we discussed earlier = more income. Not to mention GM is leading the automotive world in engines. Oh, almost forgot. Extended powertrain warranty will get an enormous increase in buyers = more income. GM is doing and will continue to do fine.
|11-25-2006, 12:32 PM||#7|
Drives: 2014 ZL1 #705
Join Date: Jul 2006
Location: SA, Texas
Kerkorian lowers his stake in GM by 25%
Analyst says proxy battle for automaker is less likely
November 23, 2006
Email this Print this BY MARK PHELAN
FREE PRESS BUSINESS WRITER
The likelihood that Kirk Kerkorian might try to oust General Motors Corp. Chairman Rick Wagoner appeared to diminish Wednesday on word that the billionaire investor sold 25% of his stake in the automaker -- 14 million shares.
Kerkorian's Tracinda Corp. sold the stock for $462 million to an unnamed buyer.
Before the sale, it had been widely suspected that Kerkorian would use his financial clout to attack Wagoner's leadership team, which spurned the alliance with Renault SA and Nissan Motor Co. that Kerkorian promoted.
"Selling his shares means he's less likely to mount a proxy fight" to take control of GM, said David Healy, analyst with Burnham Securities. "He's just stirring the pot. He's driving the stock up and down. GM's stock tends to react psychotically to Kerkorian's moves."
Added Hossein Nivi, dean of the college of business at the University of Detroit Mercy, "This is potentially a sigh of relief for GM management."
The identity of the purchaser of the stock was not immediately known. GM's stock price, which opened trading Wednesday at $32.35 a share, fell $1.52, or 4.6%, following the sale's disclosure.
News of the sale came the same day Kerkorian offered to buy up to $825 million worth of stock in casino operator MGM Mirage. He already controls the Las Vegas-based gaming company.
"The first thing you think of is that by selling one, he raised more than half the cash to buy the other," said Joe Phillippi, principal of AutoTrends, a Short Hills, N.J., auto consultant. "That's how it computes."
The $33-a-share price Kerkorian received for his GM stock is slightly higher than what it traded for before the sale was announced.
"It's interesting he got $33 a share," Phillippi said. "It normally takes some kind of a discount to move a big chunk of stock like that. Somebody must think GM's a good buy at $33."
The sale appears to represent a profit for Kerkorian, who accumulated his holding through several purchases at different prices in 2005.
GM had no comment. "It is not GM's practice to comment on the motivations, actions or potential actions of its stockholders," spokeswoman Rene Rashid-Merem said.
Kerkorian objected strongly to GM vetoing the Nissan-Renault alliance. His lieutenant Jerry York resigned from GM's board of directors Oct. 6 after a stinging attack on the company's rejection of the deal.
York and Kerkorian initiated talks with Renault-Nissan in April.
"If Kerkorian was planning a proxy fight" to oust Wagoner's management team, "he would probably have kept his shares," Nivi said. "Reducing his shares gives him less voice."
The talks with Renault and Nissan, which ended last month because GM management did not believe the deal would do the company much good, "created a tremendous amount of havoc," Nivi said. "GM management spent a lot of time distracted from product development by the discussions."
Kerkorian's Tracinda is now GM's fourth-largest shareholder, with 42 million shares. Kerkorian's share of the company fell from 9.9% to 7.4%. Tracinda had been GM's second-largest investor.
GM's stock has fallen 11% since Nov. 16 on speculation that Kerkorian would cut his stake, but is still up 60% this year as investors bet the company's cost-cutting moves and new products will return it to profitability.
"GM's management is doing a good job," Healy said. "Look at their results. The company will probably make $4 or $5 a share in 2006 and $8 or $9 in 2007." GM lost $10.6 billion in 2005.
Tracinda spokeswoman Carrie Bloom did not returns calls seeking comment.
Kerkorian sparked a surge in GM's stock price in May 2005 when he announced he planned to build a large stake in the company.
While he initially said he would be a passive investor, the self-made billionaire soon demanded a seat on GM's board for his longtime associate and adviser York, a former Chrysler Corp. executive with long experience in the auto industry.
York had been critical of the pace of GM's cost-cutting. Among other things, he advocated shedding the company's Saab and Hummer brands.
When GM management did not heed York's advice, he and Kerkorian asked Renault and Nissan CEO Carlos Ghosn if he would be interested in replacing Wagoner as GM's CEO.
Ghosn, who oversaw a fast and dramatic turnaround at Nissan, declined the offer, so Kerkorian and York floated the idea of folding GM into the Franco-Japanese alliance Ghosn had created.
Ghosn was interested, but GM brass was cool to the idea. When company officials did not pursue the alliance quickly enough to suit them, Kerkorian and York went public with the idea.
Contact MARK PHELAN at 313-222-6731 or firstname.lastname@example.org.
|11-28-2006, 10:15 AM||#9|
|11-30-2006, 02:47 PM||#10|
Kerkorian will sell 14 million more shares of GM stock
Kerkorian will sell 14 million more shares of GM stock
November 30, 2006
BY ASSOCIATED PRESS
Billionaire investor Kirk Kerkorian says he is further cutting in half his stake in General Motors Corp. to 4.95 percent.
Kerkorian will cut his General Motors Corp. stake by 14 million shares, his second reduction in less than two weeks, according to a regulatory filing.
Kerkorian’s Tracinda Corp. agreed to sell the stock tomorrow, lowering his holdings to 28 million shares, or 4.95 percent. He cut his stake to 7.4 percent from 9.9 percent on Nov. 22.
|12-01-2006, 04:11 PM||#11|
KERKORIAN DUMPS GM
He sells off remaining stake, report says
December 1, 2006
BY JOE GUY COLLIER
FREE PRESS BUSINESS WRITER
Billionaire Kirk Kerkorian apparently sold his entire remaining stake in General Motors Corp. on Thursday, ending a drama that could have reshaped the global auto industry but concluded with the 89-year-old activist shareholder walking away with little or no profit.
The Wall Street Journal, citing a source close to the situation, reported Thursday night on its Web site that Kerkorian had sold his remaining 28 million shares, giving up all ownership of GM stock.
No Securities and Exchange Commission filings yet show the sale, but a note sent by a leading Wall Street investment firm also speculated that Kerkorian sold the rest of his GM stock.
Earlier in the day, Tracinda Corp., Kerkorian's investment firm, filed a document saying it had sold 14 million shares, bringing its GM stake to 28 million shares, or 4.95%.
Later in the day, a transaction involving 28 million shares of GM stock at $29.25 moved on the New York Stock Exchange, according to Merrill Lynch auto analyst John Murphy.
"It appears that Kerkorian may now be out of his entire GM position," Murphy wrote.
Kerkorian and his representative on the board, Jerry York, had become frustrated with GM management after alliance talks with Nissan Motor Co. and Renault SA fell through, the note said.
"The news of Kerkorian exiting his position is what we think the market feared most," Murphy wrote. "It now appears instead of becoming a more aggressive activist, he may be allocating his capital to other opportunities he believes have higher potential returns. However, we believe Kerkorian and York saw tremendous potential value in GM and therefore may be back at a more opportune time."
A GM spokesman said late Thursday that the company had no direct knowledge of a sale, but acknowledged that few stockholders had 28 million shares to sell.
Tracinda's announcement that it had sold 14 million shares for the second time in as many weeks -- cutting its stake by half in November -- left analysts speculating that Kerkorian, who once tried to take over Chrysler Corp., may be done trying to influence GM -- and might be getting out of the auto industry altogether.
The two stock sales filed with the SEC involve a combined $864 million in GM stock.
If Kerkorian sold the remaining 28 million shares to longtime partner Bank of America for $29.25 a share, as the Journal reported, that transaction was worth $819 million.
Combined, the sales would have generated about $1.68 billion -- roughly equal to Kerkorian's original investment of about $1.69 billion.
Even before the final sale was reported, several analysts speculated that Kerkorian was giving up on GM because of the failed effort to push the world's largest automaker into the successful alliance between Renault and Nissan.
"It's about control," said Kevin Tynan, an auto analyst for New York-based Argus Research Co. "That's what these huge positions are about."
Kerkorian likely is taking his money and moving it to companies where he can have more control, Tynan said. In addition to the GM stock sale, Tracinda announced plans last week to invest $825 million in MGM Mirage stock.
"He's not feeling all that influential" at GM, Tynan said. "There's plenty of other companies. ... There's plenty of places where you can be more influential."
Since spring 2005, Kerkorian had been buying up shares of GM stock and increasingly trying to exert his influence over the company. GM began alliance talks earlier this year with Renault and Nissan, both of which are run by Chief Executive Officer Carlos Ghosn, after Kerkorian and York contacted the companies.
When those talks fell through in October, York resigned from the GM board. He also shot off a letter questioning the company's future and calling the GM board complacent.
"Frankly, to get to the crux of the matter, I have not found an environment in the boardroom that is very receptive to probing much beyond the materials provided by management," York wrote.
GM stock closed Thursday at $29.23, down less than 1%. Stocks often decline after a major investor sells off shares because smaller investors follow what they believe is "smart money" getting out, Tynan said.
Kerkorian bought GM shares at an average price of $30.24, according to a Free Press analysis conducted this spring. This week's 14-million-share sale, expected to close today, was worth $28.75 per share. Last week, he sold at $33 a share.
The average sale price on the three transactions was a fraction over $30.06 per share -- a narrow loss on paper, before transaction costs and other factors.
Kerkorian's intentions had been murky throughout the day. A spokeswoman for Tracinda said Thursday no statement would be made beyond the SEC filing. GM also declined to comment.
"Clearly our focus has been and will continue to be on the turnaround" of the company, said GM spokesman Tony Cervone. GM lost $10.6 billion last year, but recently has shown operating profits.
When his stake in GM dropped below 5%, Kerkorian no longer was obligated to issue a filing to the SEC each time he buys or sells GM stock.
Peter Morici, a University of Maryland business professor who tracks the auto industry, said Thursday afternoon it was too early to tell what Kerkorian had in mind.
Kerkorian could have been reducing his ownership to work behind the scenes to change GM, Morici said, since Kerkorian's first route -- getting York on the board -- did not work.
Even in the afternoon, a proxy fight appeared unlikely, said Joe Phillippi, a principal with AutoTrends Consulting in Short Hills, N.J. He said he thought Kerkorian was just cashing out his investment.
GM has cut costs dramatically over the past year, but many investors and analysts will not be convinced of a true turnaround until they see new products catch on in the market, Phillippi said. The stock, in turn, could be stuck around $30 for a while.
"There's not much to drive the stock upward substantially," he said.
The stock sale is welcome news for GM management, Phillippi said. GM spent almost three months exploring a global alliance that never materialized. "It does remove a source of management distraction," he said.
If Kerkorian's sales keep pushing down GM's stock price, workers and retirees who also are shareholders likely will continue to feel the impact.
Alfred McLean, a 65-year-old hourly worker at GM's Tech Center in Warren, has 800 shares that he says now are in jeopardy.
"I'm not too happy about it because GM's stock has dropped," he said. "To me, as a little guy, that's a lot of money for me to lose. I think he's playing a game. He's driving it down and then will buy it back."
McLean said Kerkorian was not interested in the employees or the product, just making money.
Greg Nash, a former GM engineer in Pontiac, said Kerkorian is selling his shares because he simply doesn't see a return on his investment.
"And I don't blame him, actually," Nash said. "I'm not too fond of how GM is doing their daily business."
If this is the end of the line for Kerkorian and GM, it could also mark the last time the former boxer and fighter pilot tries to exert control over a Detroit automaker. He made an unsuccessful takeover bid for Chrysler Corp. in the 1990s.
"I don't see him turning up at Ford," Phillippi said.
Contact JOE GUY COLLIER at 313-222-6512 or