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The Man Behind the (MGM) Mirage

By Chuckmonster on Saturday, 23rd July 2005 6:42pm
  » filed under Las Vegas  comments: 0


Few investors have the capacity to confound convention and get away with it like Kirk Kerkorian. Last week, the legendary 88-year-old investor, said to be America's fourth richest man, was reported to have made $100 million in a little over a month on a highly counter-intuitive bet on General Motors shares. In early June, Kerkorian bought 18.9 million GM shares just as the troubled carmaker's stock was downgraded to junk. His surprise purchase not only sparked rumours he might try to take over the firm (as he once tried to take over Chrysler) but caused turmoil among hedge funds and institutional investors who bet wrongly that the company's shares would fall. (One British fund, GLG, lost 500m. )

Kerkorian now owns 40.9 million shares, or 7.2 per cent, of GM stock, making him the third-largest shareholder in the world's biggest - and sickest - carmaker. What he actually wants with GM is less clear. After all, he once built up a supposedly passive stake in Chrysler before launching a takeover bid. He is currently suing the combined DaimlerChrysler arguing he was fooled in supporting the merger.

Many have tried and failed to understand Kerkorian's business strategy. But whether it's carmakers, troubled airlines, film studios or Las Vegas casinos, the ex-Mosquito pilot has a knack for buying low and selling high. He's an eccentric and inscrutable octogenarian with the energy of someone one-third his age who has built himself an $8.9 billion fortune from nothing.



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