Today's WSJ announced that Kirk Kerkorian had sold the rest of his shares, completely closing out his 9.9% position of 56 million shares with a value of about $1.6 billion.
In an earlier post (1/25/06), I described Kerkorian's long history of successful, but unusual investments. I also described how difficult it was to replicate his decisions because they were made, in part, by his ability to directly affect the outcome.
True to form, Kerkorian studied the situation, purchased shares, got Jerome York to propose solutions and set about accomplishing them. Management seemed to listen, for a brief period. But when it really came to making changes, like cutting inefficient projects, such as Saab or Hummer, management balked. The more dramatic proposal of creating a global alliance with Nissan-Renault was rejected under the reasoning that GM was not getting enough. I believe that the real likelihood was that the management getting enough.
Rather than fight it out, Kerkorian was slightly above breakeven and simply sold his shares. I think GM has lost its best asset. When Wagoner was asked about the move, he replied that management was focused on eventually posting positive cash flow and earnings, saying "that's what shareholders, all of them, really care about." It makes me wonder who bought Kerkorian's shares so as to become one of those caring shareholders?
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