Automotive News [sub] reports that billionaire investor Kirk Kerkorian has sold part of his 6.5 percent stake in Ford Motor Co. and could sell the rest before this blog hits the net. This according to spokesfolk for Kerkorian’s investment “vehicle” Tracinda Corp. “Tracinda, which has invested about $1 billion in Ford, said in regulatory filings it sold 7.3 million Ford shares on Monday in the open market for an average price of $2.43 per share. Tracinda intends to further reduce its holdings, including the possible sale of all of its remaining 133.5 million shares, or about a 6.09 percent stake, depending on market conditions and available sales prices.” Hang on; is this the same Captain Kirk who offered a cash infusion to FoMoCo in June? The same Lion of Las Vegas who, according to last Friday’s Bloomberg report, “pledged another 50 million MGM shares to back the $600 million Bank of America Corp. credit line he used to buy into the second-largest U.S. automaker?” Yup. There’s at least one analyst and an investor with a massive egg on their respective faces…
The pledging of additional MGM shares “indicates Tracinda’s desire to hold on to its Ford investment in the face of a potential margin call,” said analyst Brian Johnson at Barclays Capital in Chicago, before the weekend. “I would be concerned if he got out.” Bernie McGinn, of McGinn Investment Management in Alexandria, Virginia (which owns some 325k Ford shares) previously pronounced. ‘I’m hoping to see Kerkorian not flush his Ford position. It’s a continued vote of confidence.'”
Does this mean KK thinks Ford’s doomed? “Tracinda Corporation… sees unique value in the gaming and hospitality and oil and gas industries and has, therefore, decided to reallocate its resources and to focus on those industries.” So, yes.
Has Kirk Kerk’s dalliance in auto deals been fueled by sidekick Jerry York’s need to exercise power over his former employers?
He was offering about $8.50 last spring for shares he just dumped at a ~$6.00 loss. Perhaps KK figures that GM/Chrysler will file C11 and drag Ford down with it?
So he takes a $600+MM loss on his shares.
That’s gonna leave a mark.
Ladies and gentlemen, we have just lost cabin pressure.
Ouch, there goes one of Ford’s lifelines.
This is a vote of no confidence. He’s saying, “I think the stock will go down more.” Kerkorian has been around long enough to know that the stock market (in general) will eventually recover, so now is not the time to sell (in general). But he clearly thinks there is better uses for his money (what’s left of it).
Have you considered the possibility that Kirk is hurting for cash and had to sell some assets?
His core business, entertainment, is hurting, and is expensive to operate.
Raising cheap capital by bonds or loans has gotten expensive.
So perhaps he had to look at his portfolio and decide what to sacrifice. His thinking might be “I don’t own enough to make the changes at Ford I want. I won’t be able to invest more, so I might as well get out.”
Just a thought… this sale might reflect more on Kirk than on Ford.
Well thought out, yankinwaoz, except –
that it may not matter what Kirk’s INTENTIONS were, or his reasons behind the move…
the fact that it is likely to be intepreted as a loss of confidence in Ford is disasterous for Ford and the 2.8 in general.
The Detroit-3 will be at zero within months.
errr death watch anyone??
Captain Kirk is hurting these days. He’s lost a good chunk of his wealth with the implosion of MGM and his inability to see how the crunch in the market generally would transfer to the auto business and hurt his stake in Ford. He just doesn’t have the funds or value in equities to back his stake in Ford, and he has to cut somewhere to shore up his own finances.
Frankly, I never expected him to stick around. Even if his financial situation didn’t go to pot, Kirk and York like to dabble in the auto business, but Ford is not GM or the once-public Chrylser. You can’t buy up enough board seats to wrestle control from the Ford family, and right now the only person the Ford family is following is Alan Muallaly.
I agree the greatest threat is the perception of confidence in Ford.
Kirk right now could not be one of Ford’s lifelines. He was offering an infusion in June because he still had some value in his various equities and the markets hadn’t imploded. Right now, he has nothing to give to Ford. Ford isn’t losing anything except temporary investor confidence as they sort out this move by Kirk.
This jacka$$ needs to see Warren Buffet for “Investments 101”, you’re supposed to buy low & sell high, not buy low and sell lower!
Smart man (but stupid to buy them in the first place).
Ford is a sinking ship…it is only a matter of time before they are fully underwater.