Captain Kirk Beams Down, Dumps Ford Stock
According to Automotive News [sub], investor Kirk Kerkorian’s Tracinda Corp sold off its 133.5m share position in the Ford Motor Company. Tracinda first revealed that it would divest its Ford holdings in regulatory documents filed in October. It has now confirmed the complete sale. Tracinda spent over $1b on Ford stake beginning in April, paying an average of $7.10 per share. At the time of writing, Ford is selling at $2.22 per share and falling. Kerkorian’s losses in Ford are estimated at over $660m. Still, the ninety-year-old money man can take the hit. Not only because he’s close enough to the end of his life to not give a dman, but also because Forbes rates “the Lion of Las Vegas'” current net worth at a $16b. Ford was the third Detroit automaker to attract Kerkorian’s attention; the sale marks the end of his tortured involvement the major domestic auto OEMs. Of course, when they file, Kirk or his minions might go bargain hunting…
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Call me crazy but I don't think K.K. is making the right move. I believe Ford is going to survive and make it through and I'm putting my money where my mouth is- I have bought Ford bonds. It's a risky bet but in my view a good one, since I paid 15% of face value.
Probably needs money to prop up his Vegas ventures. Vegas is being hit hard by the downturn.
Tis the season to take your losses so that Uncle Sam can share the pain. Income tax receipts at the state and federal level are going to take a massive hit in the first half of 2009 as the consequences of this melt down work their way through to tax returns. The downdraft hitting big earner's annual bonuses is also going to be a big problem. Not long ago the governor of New York State noted that Goldman Sachs bonus haircut would mean the loss of $168m of income taxes to New York alone.
The sale of his Ford stake is almost entirely to support his sagging Vegas ventures... He bought the Ford shares on leverage from the MGM shares. But those shares have since plummeted even further than Ford's shares. Kind of a bad situation to be in, but what has that taught us about over-leveraging ourselves with the hope of making a quick buck?