What if you threw a party for 20 million guests and over a billion said sure, they'd love to go! The AP [via Yahoo!] reports on Tracinda's offer to buy Ford Motor Company common stock for $8/share. Roughly half of the outstanding shares were tendered against the offer. The response reflects the pervasive pessimistic view of FoMoCo future; offer stockholders a little over the present trading price and they are so out-a-here. Maybe Kirk has a dastardly plan to buy up 10k Ford Explorers for $15m (fleet pricing), sell 'em to friends in Saudi Arabia, drive up the price of Ford stock, then dump his stock at a profit. Far fetched for sure. But what other explanation can we devise for Kirk Kerkorian's hots for Ford stock? Unless, of course, you have plans to seize control of the company.
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I only own a few shares of Ford. I turned this one down. Not because I wouldn’t have made money (maybe a hundred bucks or so), but because Krekorian is a cancer that should have no root in any automotive company.
Unfortunately money talks for most people.
The guy is scum. Hey, I have my principles!
I’ve got 200 shares on hand, and I turned it down as well. I’m confident that Mr. Mulally and Ford’s upcoming products will have that stock trading at much higher than $8 eventually.
I thought the tender was contingent on the Ford’s giving up special voting rights. Isn’t that like saying I will buy your land at a 10% premium if the oil company throws in the mineral rights for free?
I must have missed something.
“I thought the tender was contingent on the Ford’s giving up special voting rights.”
No, the tender was for shares already traded on the market and had no such contingency. There has been speculation that if and when Ford needs more cash and Kerkorian is willing to provide it, he will almost surely demand equal voting rights for his shares. So far, that hasn’t happened. But, stay tuned.
What does this say about the probability of a significant rise in the stock price? To me it says not likely since so many people want out at just a little higher than the current price. Of course they could become optimistic, and no doubt some would, if things start looking better. But many would not and that’s enough to put a cap on the stock I think.
I can’t imagine what Kerkorian would do to extract value from this company. Sell what? And I don’t understand why he’s even investing now. Better to wait until the company gets desperate for money and then fork some over to become debtor in possession or in some way have priority over normal stock holders such as he is now. I guess we’ll (I’ll) learn something from this assuming he doesn’t get disgusted as walk as with GM.
He’s a business man. This is what they do.
You think Buffet only buys solvent companies?
Not until Americans start thinking about the Global sucking sound will things change.
It has to be his ego. He has more money than he will ever need. for some perverse reason this guy wants to run an auto company. he has tried to control all three in US. (he must be crazy)
Greed runs this country…
While those few reject..many more will go for it!
Ford was our last hope……..
Don’t know for sure, but my guess is that Buffet does buy only solvent companies. I’m reading “The Intelligent Investor” by Graham with the preface and an appendix by Buffett. Just got into it, but it looks like the advice is going to be buy solid companies and avoid going for home runs.
I don’t know what drives him (Kerkorian). Maybe ego or maybe just enjoys playing the game. As long as these people don’t destroy a company and all the lives involved, they might serve a positive purpose. For some reason Icahn bugs me more than Kerkorian. Can’t stand Icahn.
Yup, Buffett only buys solvent companies. He runs the numbers of every publicly traded company constantly until he finds one who’s stock is undervalued, swoops in, and buys the whole thing. He always leaves existing management in place, because one of the reasons he bought the company in the first place was that he thought they were doing a good job, just that they weren’t being respected for it on Wall Street. This also explains why the companies Buffett owns are some of the most boring companies on the planet (Fruit of the Loom, Buster Brown Shoes, etc.) because it’s more likely that companies that aren’t “flashy” are going to be undervalued.
Buffett is a completely different type of investor than Kerkorian. Buffett buys and holds. He perfers to do nothing than to screw up. Kerkorian is in it for the thrill of the chase. For instance, Kerkorian bought and sold the MGM movie studio three times.