Billionaire investor Kirk Kerkorian announced today that his investment firm Tracinda Corp. had cut its stake in General Motors from 9.9% to 7.4% by selling $462 million worth of the automaker's stock. That amounts to a sell off of 14 million shares at $33 per share.
The move by Kerkorian comes after the soap opera-like events surrounding a proposed alliance between General Motors and Nissan/Renault that ultimately fell through despite Kerkorian's support. In fact, Kerkorian and the man he placed on GM's board, Jerry York, were the ones who proposed the alliance and approached Nissan/Renault without the board's knowledge. Many postulate that GM CEO Rick Wagoner didn't appreciate the surreptitious move that usurped his power and he therefore made sure the proposal was shot down. A committee chosen by Wagoner was set up to evaluate the alliance and found that the proposed alliance would benefit Nissan/Renault more than it would GM. For its part, Nissan/Renault was unwilling to pay a large sum of money that numbered in the hundreds of millions, which GM proposed would even out the partnership. On account of the failed alliance, Jerry York resigned from GM's board on October 6th.

Who knows what goes on in the mind of Kirk Kerkorian, but knowing what we know about GM's product lineup stretching out through 2010, we'd have to say that selling his stake in the company is a move that will probably lose money in the long run. We're not financial analysts by any means, but GM's turnaround has just started the back nine and will bear fruit in the form of profits before the end of 2008. Or so says our Magic 8-Ball.

[Source: Automotive News]

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