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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Roads End who wrote (31831)	5/5/2005 2:47:07 PM
From: orkrious	Read Replies (2) \| Respond to of 110194

Kerkorian Saw GM Downgrade Coming By James J. Cramer RealMoney.com Columnist 5/5/2005 2:05 PM EDT Click here for more stories by James J. Cramer thestreet.com General Motors (GM:NYSE) BULLISH Price: $31.09 \| 52-Week Range: $24.67-$48.85 # Kerkorian bought made his tender offer for GM when he probably could have waited. # But he's out to save the company. # And the tender offer is the most expedient way. Position: None The footrace in General Motors (GM:NYSE - commentary - research) is on. If the company does the right thing and cuts the dividend in order to show that it means business to the bond regulators, the stock will plummet. But if the stock plummets, then everybody tenders to Kirk Kerkorian. If everyone tenders to Kerkorian, what kind of leverage would he have with the board? What could he do? Again, I keep coming back to the unbelievable skepticism with which people are viewing Kerkorian's bid. It reminds me of the bogus bid for Dayton Hudson some lunatic made in 1987. Somehow he got to the people who write the tape and announced a premium bid. The stock traded up and then it was revealed to be a hoax. I know because I was able to sell a lot of stock up huge into the chatter and the buyers tried to break the trade. This isn't at all like that. It is true that, had Kerkorian waited a few days, he probably could have bought mucho shares on this downgrade below his tender price. But you know what? So he's impatient. So he recognizes time is of the essence. He can't wait. He has to get in there to help save the company now. This is the quickest way. So, underestimate him. Short the darned stock. Do whatever makes you happy. But you know that Kerkorian saw the downgrade coming. You can't just presume that someone this rich and this savvy is doing this thing just for the sake of ink. Especially when he has always shied away from ink. Especially when he tends to work quietly, behind the scenes.