ALEX CHADWICK, host:
And that man buying GM is buying in a big way: billionaire investor Kirk Kerkorian. A couple of days ago, he said he wants to control 9 percent of GM. He's willing to pay $31 a share for GM stock. It had been trading in the mid-20s. It went up sharply on that news, only to fall back again yesterday after the bond news. But Mr. Kerkorian apparently thinks GM is undervalued, and as DAY TO DAY's Mike Pesca reports, this investor has a long record of winning bets.
MIKE PESCA reporting:
Rifle Right Kerkorian, as Kirk was known in his days as a prizefighter, was the California-born child of Armenian immigrants, who was lured into piloting bombers from Canada to Scotland at a thousand dollars a pop. The problem was the planes' fuel tanks enabled them to go 1,400 miles, but the flight was over 2,000 miles long. Somehow Kerkorian made the trips, he made his money, and he wound up making a killing when he set up a company which arranged short air jaunts from Los Angeles. The destination was the burgeoning gambling mecca in the desert, but Kerkorian was unlike another wealthy aviator lured to Los Vegas.
Mr. HOWARD STUTZ (Business Reporter, Las Vegas Review-Journal): I mean, Howard Hughes was a buyer. Kerkorian was a builder.
PESCA: Howard Stutz, business reporter for the Las Vegas Review-Journal, has briefly talked to Kerkorian, which is about as much access as Kerkorian ever grants the press. Kerkorian parlayed deal after deal in Las Vegas until his MGM company bought Mirage in the '90s, then merged with Mandalay. Today, Kerkorian's hotels account for 49 percent of all the rooms on the Vegas Strip. Kerkorian never veered from his style of not sentimentalizing his businesses, says Richard Siklos, columnist for The Sunday Telegraph of London.
Mr. RICHARD SIKLOS (Columnist, The Sunday Telegraph): On balance, he has been a bit of a raider in that he's definitely found ways to mine for the maximum amount of personal profit time and again.
PESCA: Kerkorian's best-known deal, or deals, is with MGM film studios, which he bought and sold three times. Variety editor Peter Bart, who was a senior vice president at MGM under Kerkorian, says he knew the studio had a problem from a phone call he received early in Kerkorian's tenure.
Mr. PETER BART (Editor, Variety; Former MGM Senior Vice President): My assistant got a message from his assistant that he would like to go to the set of a picture being directed by Michael Crichton, and it was sort of a horror picture. But he was fascinated by it and wanted to go, so I told my assistant to tell his assistant that since Kerkorian owned the company, he could just walk onto the damn set; doesn't need my permission. If he feels so distanced from the enterprise that he doesn't want to drop by the set of a movie without getting the approval of one of his bureaucrats, then I know we're in trouble.
PESCA: Kerkorian made money on each of his MGM sales, but he left the studio a bit of a toothless lion, says Peter Bart.
Mr. BART: But certainly in the motion picture industry I think most people would agree that the public or the public companies didn't benefit in the long term from his stewardship.
PESCA: Other than casinos and studios, Kerkorian's best-known investment may have been with Chrysler, in which Kerkorian was the largest individual shareholder for a time. Richard Siklos says his GM play may be reminiscent of that.
Mr. SIKLOS: He's been accused from time to time--for instance, with Chrysler--of being a so-called greenmailer, and just trying to get them to buy him out at a higher price, or he's just driving the stock up so he can sell out at a higher price. And, you know, he's ultimately maybe not so interested in what happens to these businesses in the long run.
PESCA: The long run is growing shorter. Kerkorian is one month shy of his 88th birthday. Whatever value he wants to unlock with GM, it's unlikely he'll be able to nurture along the company for a decade as he did with Chrysler. Even multibillionaires don't live forever. Mike Pesca, NPR News, New York.
CHADWICK: This is Alex Chadwick. NPR's DAY TO DAY continues.
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