Wednesday, May 04, 2005

 

Kerkorian Angles For Additional GM Ownership

Kirk Kerkorian (sounds kinda like "Kevorkian"), best-known in recent times for his multi-billion lawsuit against Daimler, has resurfaced in the news once again with his offer to buy approximately 5% of outstanding GM shares.

In my mind, there's two reasons he'd do this - no, no, make that three. I initially thought he's doing this either because he really believes in GM and thinks there's a dramatic potential upside to their stock price, or else he thinks the company is ripe for a take-over or liquidation and he wants to get in on that action.

The third option that hit me just as I'm typing this is that he wants to get a temporary boost in the stock price so that he can unload what he already owns (22 million shares, or about 4% of GM), but I gotta imagine that there's SEC rules barring such a thing. Or maybe not.

Frankly, I don't see either of the first two scenarios happening. I honestly don't think there should be any hope of a long-term increase in GM's stock price, not with all the bond debt they're carrying. And I don't think the company is yet ready to throw in the towel and liquidate - things are bad, but not yet bankruptcy bad. So I'm left thinking that Kerkorian is either off his rocker, and/or just looking for attention now that his circus of a court trial has wound-down.

UPDATE: Looks like the folks at Autoblog came to the same conclusion.

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