Billionaire Kerkorian Sells Last of Ford Stock
December 30, 2008
By Michelle Krebs
Perhaps now, at age 91, Las Vegas billionaire Kirk Kerkorian has finally given up on the auto industry that has not been particularly good to him.
On Tuesday -- just in time to take year-end losses -- Kerkorian sold the last of his investment in Ford. The move came just six months after Kerkorian's Tracinda Corp. bought a 6.49 stake in Ford and carries with it deep losses. Kerkorian's purchase was seen as a vote of confidence in Ford's turnaround strategy and its management led by former Boeing exec Alan Mulally.
But in October, with Ford stock trading at historic lows and coinciding with the abrupt departure of Chief Financial Officer Don Leclair and resignation of two board members, Kerkorian began selling off his stock. By month's end, Kerkorian reported his stake had fallen below 5 percent. Ford's plummeting share price had also jeopardized Kerkorian's control of MGM Mirage because he was forced to put up more shares in the casino company to secure a credit line he had used to buy Ford stock.
Experts estimate Kerkorian lost between $400 and $800 million into his foray into Ford land, only one of his money-losing ventures with Detroit automakers. In fact, he owned stock in all three at one time or other.
In 1995, Tracinda made a hostile takeover bid for Chrysler and became its largest shareholder when the automaker began talking merger with German automaker Daimler-Benz in 1998. Kerkorian sued -- and lost -- over the terms of the merger.
He made another bid -- one for $4.5 billion -- for Chrysler in 2007 when Daimler put the automaker on the auction block. But private equity firm Cerberus Capital Management won the contest.
In 2006, Kerkorian bought a nearly 10 percent stake in General Motors. His top lieutenant Jerome York, formerly a Chrysler executive, got a seat on the board and tried to force an alliance with Renault-Nissan that would have made Renault-Nissan CEO Carlos Ghosn head of the larger combined entity. But GM's board rejected the link. Kerkorian sold his GM stake and York resigned from the board - in exasperation.
A Tracinda spokesman said Tuesday, after the sale of Kerkorian's Ford stock was revealed, that the company now would focus its investments on energy, casinos and hotels.
Undoubtedly a better bet than the auto industry.
Posted by Michelle Krebs at 6:33 AM under Business , Chrysler , Companies , Ford , GM , News , Personalities | Comments (1) | digg this | Seed Newsvine
Less short-term speculators and hopefully more car people running things. This is a good thing.
Posted by: georgehughes35 | December 31, 2008 at 10:43 PM