Trojan Horse At GM's Door
by Rick Ackerman
Thursday, Dec 08

What the heck could GM investors be thinking? A surge in the stock late yesterday cut the DJIA’s losses nearly in half, but you’d have to be a cynic to believe the celebration was warranted. The news that caused GM shares to rise 2.9 percent in mere minutes concerned the growing likelihood that Kirk Kerkorian, a 9.9% stakeholder, will get a seat on GM’s board. Kerkorian’s hatchet-man, Jerome York, managed to squeeze impressive tribute from Chrysler when he was installed on that company’s board a decade ago, but the auto manufacturers were on the threshold of a cyclical upswing then that eventually turned every marque but Yugo into a winner.

Before GM shareholders break out the bubbly, they should check out what that stalwart humanitarian Carl Icahn is proposing for Blockbuster. Icahn has been trying to extort a $330 million dividend from the firm, presumably before it goes bankrupt. He also has the chutzpah to suggest that Blockbuster missed the boat when it passed up a chance to buy rival Hollywood Entertainment. But for what? To drill for oil in their mostly-vacant parking lots? If Kerkorian puts the screws to GM with equal recklessness, the automaker is going to be worth less at wholesale than American Motors was when Chrysler absorbed it nearly two decades ago.

Having sucked up quite a chunk of GM at $31 a share, Kerkorian is understandably eager to retrieve them from the low-$20s abyss into which they have fallen recently. But for investors to act as though the Midas touch is about to transform GM or even the sum of its part into a winner is tantamount to rolling out the red carpet for the Trojan Horse.

link to article: http://www.321gold.com/editorials/ackerman/current.html

yep its gonna be a dividend cash grab. leaving gm in ruin.

i dont think lutz will let them mess up the product line too much...

there should be laws against this...

Whatever Kerkorian's plans are, he's keeping them well hidden. I can't blame him.