Kirkorian Divests GM Stock
Nov 30, 2006 in Automotive, Finance
After investing in nearly 10%, 40+ million shares, in the troubled automaker Kirk has finally left GM alone. Many people first thought that Kirk was going to try and take over the board and boss management around. However, shares of GM slumped to $28 almost immediately, which in my opinion is way too low. Kirk’s sale is not a complete surprise. Kirkorian had been pushing for a partnership with Renault and Nissan for the longest time, but it was rejected by the GM board as being too one sided for the foreign companies. Carlos Ghosn was fairly receptive to the idea given Nissan’s demand for domestic manufacturing capacity and GM’s large surplus. However he was not too keen on Rick Wagoners demand for a large investment in GM and/or cash transfer. At these levels I am an investor in GM, I think GM will bounce in the very near future especially with Q4 earnings coming up in January and time to think about this emotional selling that is occurring.
Thiago Avila