GM is in a difficult position. It's situation is made even more interesting by Kirk Kerkorian's recent tender for 28 million shares at $31. Note too, that Kerkorian hired former Chrysler Corp. Financial Officer Jerry York as a consultant. In its SEC filing on the May 9th, Kerkorian's investment company Tracinda Corp claimed that it was acquiring shares for investment purposes.
Tracinda is acquiring the shares for investment purposes and does not have a present intent to acquire or influence control over the business of General Motors. We may, from time to time, subsequent to the expiration of the Offer, acquire additional shares or dispose of some or all of our shares or may continue to hold the shares, depending on business and market conditions, our continuing evaluation of the business and prospects of General Motors and other factors. Tracinda does not have any current plans, proposals or negotiations that relate to or would result in: (1) any extraordinary transaction, such as a merger, reorganization or liquidation involving General Motors or any of its subsidiaries; (2) any purchase, sale or transfer of a material amount of assets of General Motors or any of its subsidiaries; (3) any material change in the present dividend rate or policy, or indebtedness or capitalization of General Motors; (4) any change in the present board of directors or management of General Motors including, but not limited to, any plans or proposals to change the number or the term of directors or to fill any existing vacancies on the board or to change any material term of the employment contract of any executive officer; (5) any other material change in General Motors' corporate structure or business; (6) any class of equity securities of General Motors to be delisted from a national securities exchange or cease to be authorized to be quoted in an automated quotations system operated by a national securities association; (7) any class of equity securities of General Motors becoming eligible for termination or registration under Section 12(g)(4) of the Exchange Act; (8) the suspension of the General Motors' obligation to file reports under Section 15(d) of the Exchange Act; (9) the acquisition by any person of additional securities of General Motors or the disposition of securities of General Motors; or (10) any changes in General Motors' charter, bylaws or other government instruments or other actions that could impede the acquisition of control of General Motors.
However, given that Jerry York has been brought aboard, I find this "investment claim" somewhat specious. In fact, quoting from Wall Street Journal online article (subscription required) GM Plans to Cut 25,000 Jobs As Part of Turnaround Plan, "Mr. Wagoner said GM won't necessarily know the results of the tender offer from investor Kirk Kerkorian's Tracinda Corp. to increase its stake in GM to 9%. The $31-a-share offer was set to expire later Tuesday. Mr. Wagoner said he believes Mr. Kerkorian wishes to remain a passive investor in GM." Specious indeed.
As I read through GM's press release and various articles in the press regarding today's meeting of stockholders, I was left with an general impression of no signficant change in strategy. Just more of the same with hope of a different and better outcome in the future.
I don't know how GM is going to get the public excited again about buying GM cars without massive rebates or incentives. Nor do I know how GM will be able to reduce its health care obligations and get the unions to cooperate.
And then you read articles about the Chinese car manufacturers having massive surplus capacity. To me, it just spells more challenging times.
I would sure like to know why Kerkorian tendered for the additional shares. I don't see many positives for GM in the near term. But then maybe that explains why Kerkorian is a self made billionaire and I am not.
It should be an exciting few years to watch how this plays out. I've got a front row seat to watch the action.
As a matter of disclosure, I am short GM stock and have been for a while.
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