Lowriding, I followed you up to your point "b" and then that is where I don't understand something.
I just learned that Kerkorian actually borrowed the money to invest in Ford, as you stated. That was something I didn't know. However, though I understand what you said about margins, Businessweek, a very respected publication here in the US, paints a slightly different story.
http://www.businessweek.com/autos/au...ian_out_o.html
Kerkorian’s decision to pull out stemmed from a combination of Ford’s collapsing stock price, as well as his own financial needs brought about by the stock market meltdown and the financier’s investments in other companies.
The article states here that Kerkorian used 50 million shares of his MGM as collateral for the $600M loan and then pledged more as his MGM stock plunged. It would seem to indicate that he sold off his Ford stock in order to have more liquidity in his own business holdings since the price of his own stock (MGM) plummeted so much.
Kerkorian received a $600 million loan earlier this year from Bank of America for which he pledged 50 million shares of MGM Mirage, or about one-third of Tracinda’s holdings. Since his loan, MGM shares have sunk to below $13 from $53. Kerkorian last October had to pledge an additional 50 million shares as collateral for bank loans.
I'm not trying to bang heads here as I know I am certainly not a banking master, but rather checking all angles. Let me know if you get the same thing out of that article as I did. The article you linked to didn't seem to state anything about needing the money to repay margins but rather did say this though......
Meanwhile, MGM is struggling through the recession, and with prices so cheap right now (it's selling at just 9.7 times this year's expected earnings), I'd say using the cash from the Ford liquidation to invest in MGM's much more optimistic future would be a far more prudent decision for Tracinda.
The writer of that article seemed to believe Ford is doomed, from everything he wrote.
Steve