Bloomberg reports, Kerkorian Cuts Ford Stake, May Exit as Bet Collapses:

Kerkorian’s Tracinda Corp. sold 7.3 million Ford shares yesterday for an average of $2.43 each and said it contacted an investment bank about unloading the rest. Tracinda’s remaining 133.5 million shares were valued at $311.1 million yesterday.

Tracinda “intends to further reduce its holdings” in Ford to focus on gambling, hotels and energy, according to the filing, which didn’t give specifics.

Kerkorian took a loan to buy all of that Ford stock. He wants to pay back his loan to avoid risking his collateral, MGM stock. He’s taken huge paper losses on MGM (measuring in the billions) and is going to take real losses on Ford. Kerkorian is a smart guy, so if he’s dumping Ford to focus on gambling, hotels, and energy, he must believe that the prospects for recovering his capital are much greater in the latter industries.

This is going to be seen as a vote of no confidence by many. I sure view it as such. The company is losing money hand over fist. That said, with the January 2010 2.50 calls at 1.10, this appears to be a decent opportunity for a covered call. It costs net about 110 bucks… Screw it, I did it for the entertainment value. Yeah, I just bought 100 shares of F for 110 bucks. I’m not going to risk more than that, because I think it’s a stupid investment. My 14 month upside is limited to $250, and my downside is the $110. Call it betting on a bailout.