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Kerkorian Dumping Ford Shares

Tracinda, the investment company of billionaire nonagenarian Kirk Kerkorian, said it has sold 7.3 million shares of Ford and may sell the rest of its 133 million shares.

The massive sell-off represents a multi-million-dollar loss for the legendary investor, who is still the controlling owner of MGM Mirage. How bad of a loss? Shares of Ford closed at $2.33 yesterday; Kerkorian, 91, paid as much as $8.50 per share when he made his $1 billion bet on Ford.

What might this mean for the troubled automaker?

Ford, GM and Chrysler just received $25 billion in direct loans from the government to help them make fuel-efficient vehicles more quickly, by turning truck plants into hybrid-vehicle plants and so forth.

The ink wasn't even dry on the checks before the automakers said that, in fact, they could use another $25 billion in loans pretty quickly.

Kerkorian's big sell-off could further depress shares of Ford, meaning its appeal for more taxpayer money would become much more urgent.

It could also further reduce confidence in the troubled U.S. auto sector. (And to be fair, most of the auto sector has been hurting.)

And with merger talks heating up between GM and Chrysler -- remember, Kerkorian has been inside both companies -- the big stock dump could mean Kerkorian thinks a GM-Chrysler merger is a) a sure thing and b) would put Ford out of business.

We'll track shares of Ford, and the entire Detroit auto sector, throughout the day to see how Kerkorian's sell-off ripples through the market.

-- Frank Ahrens

By Frank Ahrens  |  October 21, 2008; 9:37 AM ET
Categories:  The Ticker  
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