He lost $700 million in 4 months -- and it gets worse - Top Stocks Blog - MSN Money
 
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He lost $700 million in 4 months -- and it gets worse

Posted Oct 21 2008, 11:28 AM by Charley Blaine
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Being a billionaire isn't as much fun as it used to be.  Just ask investor Kirk Kerkorian, the investor and casino magnate.

Kerkorian plunked down $1 billion in Ford Motor in the spring, ending with a 6.4% stake in the automaker. In a bit more than four months, he's seen more than two thirds of the value of that investment vanish as Ford and all the automakers have struggled with high gas prices and the crummy economy.

Monday, he said "no mas." In a Securities and Exchange Commission filing, he said he sold 7.3 million shares of Ford at $2.43 a share. And he may sell the rest.

Here's how the math works.

Kerkorian's Tracinda Corp. bought 100 million shares of Ford in April at $6.91 a share. He bought another 20 million shares at $8.50 and added 22 million shares on top of that at $6.54. Total investment: $1.007 billion.

He realized $17.7 million on this week's sale. Ford was selling for $2.22 a share Tuesday morning, which means Kerkorian's remaining stake is worth $317.4 million. So, combining what he did sell with the market value of what's left, his loss is now $689.4 million -- 68.4%.

In fact, 2008 has been very very bad to the 91-year-old financier. His net worth was estimated at $11.2 billion by Forbes magazine in September; it's now much less than that. 

Shares in his best-known holding, MGM Mirage, have fallen 85% in the last year, cutting the value of Kerkorian's shares from almost $15 billion to $2.2 billion -- a loss of $12.7 billion. MGM Mirage is Las Vegas' largest casino company, ranked by hotel rooms. The problem: a weak economy that has slammed business in Vegas.

Plus, his stake in Delta Petroleum has fallen 68.3% since December 2006, leaving Kerkorian with a loss on paper approaching $752.9 million. Worse, as the New York Post noted, he had to put all those shares up as collateral five months ago to get a $600 million credit line from Bank of America. The problem: falling oil prices.

But at least he could get a credit line.

Related reading:

Auto sales crash and burn

Car dealerships the new endangered species?

Americans own too many cars

The death of the minivan (and Chrysler?)

Comments

 

I love all this class envy.  Quit hating on the guy and go out and make somehing of yourselves.  Quit waiting for the govt. to give you your handout.  THis guy has lost a boat load of money and all you people can say is too bad, he's a billionaire.  You people are so stupid.  Who do you think provides all the jobs for you people?  I guess you wouldn't be hating on this guy so much if he ownde the business you worked for and he had to shut it down due to his losses.  I hate to burst your bubbles, but these are the people that are paying over 90% of the taxes in the U.S. therefore, without people like him your tax burden would be that much greater.  Imagine the capital gains tax this guy would have paid if he made money on his Ford stock.  Quit hating and grow up.

Some so rich and the many so poor, I wonder how that happened ? If its up to McCain lets make the rich richer and the poor poorer. That's what got us where we are today , wouldn't it be nice if everyone could just have a fraction of what the top 5% in this country have. Now it's going to be up to the poor to bale out those on wall street so they don't loose there millions or billions and so they can continue there greed . McCain talks about welfare, that's just what BUSH and his party have given the rich over the pass 8 years with there tax cuts. We have to let it go back to where is was when Clinton was in office with a balanced budget. Trickle down as not worked now it's time for a change and see if trickle up can work for once. Having been a REPUBLICAN of which I will no longer support this party for what they have become over the past 8 years we sure don't need to reward them another 4 years of the same old policies that are still for that top 5%. Also with a vice presidential choice like palin and nothing but negative ads the republican party as nothing to offer any longer. For all of you making 250,000 go ahead and vote for that BUSH / McCAIN-PALIN as you will not be getting that tax cut Obama going to give the other 95% of us anyway when he becomes are next PRESIDENT. THANK GOD.

rich guys employ poor guys.  don't forget that people!  when they tank you all will tank too.  it's a domino effect.

Hey Kent get you numbers straight. That latest income data says that if you make 150K/yr you are in the upper 5% and if you make $100K/yr you are in the upper 10%. I never received a job from someone making 30K a year! In 4 years of Obama plate for distribute the wealth through tax policy the job oportunities will lessen the demand of people needed for employment thus lowering the average wage for every American. Keep on the same path and keep distributing the wealth those poeople will take thier money and companies to some other country. What will be left?

It's good for him, he got money to loss but people who invest right now from a paycheck income because the billionaire is investing then that your choice to stupi or smart. To be safe, pls. keep your money to grow.

Maybe we should all chip in and buy him a box of tissues to cry into.  HA HA!  Play big, lose big!

I laugh when I read stupid comments whining about "pork barrel spending"..  Get your damn priorities straight.  We spend billions on oil and wars.  Who is stupid enough to think things will be better if we cut out "pork barrel spending".  

YOU PEOPLE MAKE ME SICK!

Why in heck would anyone plunk any amount of money in Ford, GM or the  ailing Chrysler Corp! I would have to say that you would deserve it!

I think he should give the money to me .[ 700 million]and I will give 1 million to 7oo

different people. I'lll give myself the last million for my efforts. Thats just the kind of guy I am. man I'm good people. I think I'm I goiong to cry.

:)  this guy is just playing the game with more money... He could have made huge amounts too!  I think he should have not sold the Ford stock at all.  He owned over 6% of that stock and he didn't have much input on the company from what I can see.  Look at Warren B.  he's all about the long term.  This guy doesn't seem to be playing the game the same way.

As to this guy helping the rest of us... they don't do that.  There not here to do that.  It would be nice.. but in the end it might not do any good anyway.

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