Monday, December 29, 2008

Billionaire investor bails on Ford

Could the decision of a billionaire investor to sell his stake in Ford Motor Co. at a loss be a signal to the market that the automobile industry will not be able to rebound, even with government help? Kirk Kerkorian's Tracinda Corp. has completed selling its 133.5 million shares of Ford, a spokeswoman said Monday, according to the Reuters international news service, and the timing is curious. Ford was considered the strongest of the top-3 U.S. automakers and, in fact, was the only one to refuse part of the $17.4 billion emergency loan package offered by the government on Dec. 18. If the automakers were going to be leading the U.S. economic rebound, the way the White House hopes, why would a wary investor like Kerkorian pull out? Not only that, the Tracinda pullout cements a huge loss for the company, which spent more than $1 billion buying Ford shares at an average price of $7.10. The stock is now selling at just over $2 a share. At one time, Kerkorian held a 6.5 percent stake in Ford, Reuters said. The Ford family holds just under 3 percent of the automaker's shares but controls 40 percent of the voting power through a separate class of shares, Reuters said.

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