May 4, 2005

Another Reason to Own this Rally

From the AP:
Kirk Kerkorian's Tracinda Corp. is offering to pay about $870 million for a nearly 5 percent stake in General Motors Corp. in a deal that would boost the billionaire investor's stake in the world's biggest automaker to nearly 9 percent.

Tracinda said in a statement Wednesday that it was offering to buy 28 million shares, or 4.95 percent, of GM stock at $31 a share in cash, an 11.6 percent premium over GM's closing stock price on Tuesday.

It said the proposed purchase was for investment purposes only.

GM shares jumped $1.83, or 6.6 percent, to $29.60 in premarket activity. A message seeking comment was left with GM.

The earnings miss by GM was at the heart of recent market weakness which adds a lot of importance to this news in my view.

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