Filed under: Ford, Earnings/Financials, Celebrities
Kerkorian begins unloading Ford stock
Kirk Kerkorian and his investment firm Tracinda Corp. made waves last summer by increasing their stake in Ford Motor Company by some 40 million shares to a total of 140.8 million shares, which accounted for 6.49% of the automaker and made the billionaire the largest single shareholder outside the Ford family itself. At the time Tracinda made the purchase, Ford stock was going for $8.50 per share. The company announced today that it has sold 7.3 million shares of Ford at an average price of $2.43 per share, leaving it with 133.5 million shares of the Blue Oval and a loss totaling some $44,311,000. Tracinda has also said that it may unload its entire investment in Ford and has already contacted an investment bank to that end, though we imagine it's waiting for the stock price to improve before divesting itself completely. When Kerkorian increased his stake in Ford last summer, there was big talk of the billionaire being behind the automaker's turnaround effort, as well as possibly buying an even larger stake in the company if things went well. As we all know, things have not gone well, and Kerkorian is taking what's left of his investment and going back to what he knows best: investments in gaming, hospitality, oil and gas.
[Source: The Detroit News, Photo by William Thomas Cain/Getty ]
Reader Comments (Page 1 of 2)
TJ 10:01AM (10/21/2008)
It's cool, I'm sure he can find most of that $44mil in the cushions of his couch.
I wonder why he is willing to take a hit like that in such a short time frame though?
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ruzzle 10:05AM (10/21/2008)
lol because he didn't want to take an even bigger hit a year from now
TJ 10:18AM (10/21/2008)
I seem to think that Ford is on the right track. They have solid powertrains, coming Ecoboost, taurus redo, redesigned F-series, and an influx of the euro-kinetic in the 2-4 year time frame, plus the impending global platforms...
Ford is not in a bad position as far as Automakers go.
Throwback 11:56AM (10/21/2008)
Kirk, is just locking in some losses. No capitol gains taxes this year. Heck, he may even get a refund.
aminiche 4:07PM (10/21/2008)
@TJ
Im with you. I think Ford is doing all the right things. But i think the question is, can they make the switch to the Euro models fast enough. Im really pulling for them.
JDC 10:04AM (10/21/2008)
Kirk has been screwing with Detroit forever and deserves the burn he is now getting from the financial loss with Ford. Bye bye Kirk! Thanks for the memories!
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fixitfixitstop 10:55AM (10/21/2008)
I agree! He's tried to bully them all, and I don't know if he ever intended to help any of them.
Like Al Davis, Kirk should just retire and go fishing or something.
Dane 10:13AM (10/21/2008)
get out of here rat!!!!!!!!!! Look at the companies future and you will be cryin' piggy!!!!!!!!!
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Benjamin Alexander 10:18AM (10/21/2008)
He keeps selling, I will keep buying. Ford won't fail, and has hit its bottom when it went to 1.98, I think.
Let him dilute the price in the short term with his massive sale, it's good for smaller investors like me, which allows me to buy more than I otherwise would have.
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Azael 10:28AM (10/21/2008)
Did he not do any research into the company before buying 140 million shares of stock?
Is he soo rich that he had never seen a Ford Minivan? One look at a Ford Minivan can tell you just how bland and low quality the company is.
Because, if he had, he would have short bought the stock instead of a long buy and made some 44 million instead of losing it.
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TJ 10:37AM (10/21/2008)
Which Ford minivan was in production at the time he purchased the stock?
C.W. 10:55AM (10/21/2008)
you cant be for real... no one on earth is this dumb...
then again, I am amazed daily and the moronic comments left on this site...
i mean really... minivans?... wow. what year is it?
Funktional 10:34AM (10/21/2008)
Anyone who thinks Ford stock has hit bottom at $1.98 is a kook. As knowledgeable as Kerkorian is, I find it unlikely he didn't see the writing on the wall when he purchased the extra stock at 6 something a share. He could just be possibly using the loss to offset some killer gains he made somewhere else in the market. Mark my words though, Ford stock will be going lower regardless of the better products and reliabilit we are seeing. Unfortunately it takes more than that in this harsh economic climate. Don't forget to cost average your stock purchases........
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SGV 10:56AM (10/21/2008)
Rumor has it that GM was counting on a Kerkorian full offensive against Ford so they could be the shining armor savior, pretty much the way Daimler was for Chrysler, and we all know how that played out.
I agree that Ford seems to be the domestic automaker better poised to succeed. Especially when GM is so willing to shoot themselves in the foot by taking over Chrysler.
There seems to be a cosmic alignment in favor of Ford's prospects and against GM future, and the delusional GM brass is doing all the wrong things to ensure that GM wont get distracted in its path to the edge.
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AZMike 11:12AM (10/21/2008)
a brief history lesson to those too young to remember;
back in the '90s (a very long, long time ago), Kerkorian attempted a hostile takeover of Chrysler. instead, the Chrysler board chose the "merger of equals", with Daimler. we know where that went.
did anyone ever stop to think (just maybe) he might be getting ready to try for Chrysler again, and is getting his ducks in a row?
Chrysler is a very viable company, and has many things to offer, like Jeep, the 300 and Charger, minivans, and the truck line...and please spare me any sophomoric comments about the Sebring and Avenger. everyone has a few boners every now and then. right from the top of my head, the Accord Hybrid, Insight, Echo, and Scion xB come to mind.
AZMike
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Jared 1:09PM (10/21/2008)
I can't agree with your assertion that Chrysler is a viable company. IMHO, Chrysler will either be merged and drastically pared down, or go bankrupt within two years.
Jeep sales have fallen off a cliff -- down more than 50%. The Wrangler still has brand equity, but the rest of the Jeep models are not selling.
The Chryco minivan is a good minivan, but minivan sales have tanked along with truck sales.
Dodge trucks have always been in third place, and the new 2009 Ram isn't going to change that. The Dakota is way past its sell-by date. Durango/Aspen weren't very good SUVs when they were first brought out, and are now far behind the competition. Sales of the Durango/Aspen are off by 70%.
The 300/Charger twins are aging, with replacements scheduled for 2010. They aren't selling either -- people aren't buying big, thirsty, down-market sedans.
The market has changed from trucks to small and midsize cars. Chrysler doesn't have viable small or midsize cars and they don't have the time or money to develop them.
AZMike 1:38PM (10/21/2008)
Jared,
you mention the non-viability of the Aspen/Durango, and the Dakota. did you see me mention those in the plus column in my post? I didn't think so. I hadn't mentioned the Compass, Patriot, or Caliber for that matter, either. I don't see any of these models in the plus column.
at this time, the real killer for all auto manufacturers is the state of the economy, an the absolute, total lack of credit available to just about everyone. I've had several friends who own new car dealers (both highline import and domestic) tell me that are having a very difficult time getting customers with 750+ FICO scores bought with banks. as you know, even Toyota sales are down over 30%. until the credit market thaws, this won't change.
as a former Dodge dealer myself, I've had to listen to inaccurate information for years. this goes all the way back to the loan guarantee days from the early 80's (no, the government never gave Chrysler a penny), thru the 90s, and onto today.
Chrysler has a very viable vehicle line, whether Cerberus keeps it, sells it to another manufacturer, or sells it to an individual or corporation like Kerkorian/Tracinda.
AZMike
Jared 1:54PM (10/21/2008)
AZMike:
We agree that the best of the Chryco models are the Wrangler, Ram, minivans, and 300/Charger.
The problem is that the market has changed. Demand is way down for trucks, Wranglers, minivans, and large sedans. The people who are buying (and who either have cash or can get credit) are buying small and midsize cars.
Chrysler is already working on an updated 300/Charger. It isn't clear to me whether that is a completely new vehicle or a refresh, but it is badly needed.
Chrysler doesn't have a credible small or midsize car. It will take them at least 2-3 years before they'll have one, if they have the development money and don't go broke in the meantime. I doubt they have the time, the money, and the talent.
Yes, Toyota sales are off 30%. But Toyota is still making profitable and has huge cash reserves. In addition, Toyota has credible small and midsize cars. The Corolla/Matrix has been the top selling car for the last few months.
In contrast, Chrysler is losing money, has much more limited cash reserves, and doesn't have credible small and midsize cars.
If Chrysler is sold or merged, it will be pared down drastically. If Chrysler is not sold or merged, it will be go bankrupt within two years.
Brn 11:22AM (10/21/2008)
Buy high, sell low?
Kerkorian isn't that stupid. He has other plans for the money.
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dukeisduke 11:43AM (10/21/2008)
Kerkorian's a jerk. I'm glad he's losing money on the sale. Go peddle your inflated ego somewhere, Kirk, and take your little troll York with you.
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