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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (45230)	1/25/2006 10:27:01 PM
From: Jim McMannis	Read Replies (1) \| Respond to of 116555

Kerkorian Buys Back 12 Million GM Shares By DEE-ANN DURBIN, AP Auto Writer 1 hour, 6 minutes ago DETROIT - Billionaire investor Kirk Kerkorian is acquiring 12 million shares of General Motors Corp. stock, matching the number of shares he sold in December, a federal regulatory filing showed on Wednesday. Kerkorian's private equity firm, Tracinda Corp., bought 5 million shares of GM stock on Monday for an average purchase price of $21.40, or approximately $107 million, it said in a filing with the Securities and Exchange Commission. On Tuesday, Tracinda agreed to purchase an additional 7 million GM shares in a private transaction for $22.25 per share, or approximately $155.8 million. Those purchases would boost Kerkorian's stake in the world's largest automaker to 9.9 percent, the same as it was before Beverly Hills, Calif.-based Tracinda sold 12 million shares in December. Tracinda said at the time that it sold the shares so that it could end its fiscal year with a capital loss, making it eligible for certain federal and California income tax breaks. Kerkorian lost $109 million on the 12 million shares he sold in December. But Tracinda left open the possibility of reacquiring shares, and it waited only a short time after so-called wash rules lapsed. Federal tax rules prohibit a taxpayer from claiming a loss on the sale of stock if replacement shares are acquired within 30 days. GM's shares fell to a 23-year low following Kerkorian's sale in December. The Detroit-based automaker has been struggling with declining U.S. sales and rising health care and materials costs. GM lost nearly $4 billion in the first nine months of last year. GM was scheduled to report its fourth-quarter and full-year results for 2005 on Thursday morning. Kerkorian has lost approximately $350 million in the total value of his 56 million GM shares since he began buying up shares at an average price of $30.10 last spring. His latest move may indicate he believes GM is listening to his ideas for improving the company. In a speech to Wall Street analysts this month, Kerkorian's top aide Jerome York called on GM to cut its annual dividend in half and set profitability goals and a timetable for achieving them. York said Kerkorian was interested in buying more GM shares and was optimistic about its recovery efforts, but he said it was time for GM to get into a "crisis mode." GM Chairman and CEO Rick Wagoner has repeatedly said GM has a clear recovery plan, including a restructuring that will cut 30,000 jobs and close 12 facilities by 2008. He also said GM's board must decide whether to cut the dividend. GM pays $2 per share annually in dividends. In trading Wednesday on the New York Stock Exchange, GM shares rose 80 cents, or 3 percent, to $23.85. Kerkorian's SEC filing was released after the markets closed, and the shares rose an additional 15 cents in after-hour trading.