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. Last Updated: 07/27/2016

Kerkorian Ditches Loss-Making GM Shares

NEW YORK -- Billionaire investor Kirk Kerkorian, General Motors' third-biggest shareholder, sold almost a fifth of his 9.9 percent stake in the company after the investment lost one-third of its value.

The 88-year-old investor sold 12 million GM shares on Dec. 15 and Dec. 19, leaving him with a 7.8 percent stake in the Detroit-based automaker, Kerkorian's Tracinda said in a filing with the U.S. Securities and Exchange Commission Tuesday. Kerkorian spent about $1.7 billion building his GM interest from April to October.

Kerkorian's investment in GM sent the automaker's stock up the most in more than 40 years in May amid investor expectations that he would press chief executive officer Rick Wagoner to boost the company's earnings.

GM shares erased those gains and have lost half their value this year after four straight quarters of losses and a U.S. market share at eight-decade lows.

"Kerkorian is betting the stock is going lower and may not recover for some time," said Eugene Jennings, a business professor emeritus at Michigan State University. "He's probably very smart to minimize his losses in the face of a board of directors that doesn't know how to manage a crisis."

GM shares fell $1.20, or 5.7 percent, to $19.85 in later afternoon in New York Stock Exchange composite trading, before Kerkorian's announcement. The shares dropped to $19.33 in early evening during after-hours trading.