This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

The Five Dumbest Things on Wall Street: Oct. 23

Stocks in this article: AMDMGMSHLD

Kirk's Kooky Logic

Kirk Kerkorian adamantly believes that his 37% stake in MGM Mirage (MGM) should be worth more. In fact, the billionaire investor is so confident his shares are undervalued that he just may sell them.

All together now: Huh?

Smart investors, and that includes Kerkorian (or at least it used to before his disastrous ventures into Ford (F) and GM), generally hold onto, or accumulate more of a company's shares if they believe the market is not giving it a fair shake. Not Kerkorian, however. On Tuesday, he said through his investment firm Tracinda Corp. that he is "exploring the possibility of strategic partnerships or other alternatives" for his massive stake in the struggling Las Vegas-based casino company.

Don't understand the method to Kirk's madness? Don't worry. MGM Mirage CEO Jim Murren can't seem to figure it out either.

"I can't speak for what their intentions are right now, but I can say that their investment intent has apparently changed," said Murren. "And it's gone from one as a somewhat a passive investor to one that's going to take a more active role in attempting to increase shareholder value for all shareholders."

Pray tell, Jim, how on earth does actively dumping a ton of shares into the open market accomplish that? MGM Mirage closed at $11.93 on Tuesday, up 1.1% for the day but down more than 87% from its Oct. 23, 2007 peak, when it closed at $92.69.

No, what MGM really needs is less shares for sale and more buyers of condos in that huge $8.5 billion white elephant on the Las Vegas Strip it calls CityCenter. MGM Mirage also said Tuesday that its third-quarter earnings will show a $955 million charge to reflect the falling value of CityCenter. MGM Mirage said its stake in CityCenter was worth about $2.44 billion as of Sept. 30.

While threatening action, albeit of an unknown sort, Tracinda said it would not make a move until after the casino at CityCenter opens in late December. At that time the world will know if Kirk plans to hold 'em or fold 'em.

Right now, however, it sure looks like he plans to walk away. Or maybe run.

Dumb-o-meter score: 90 -- Captain Kirk can't figure out how to save this enterprise.

2 of 5

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,810.06 +91.06 0.51%
S&P 500 2,063.50 +10.75 0.52%
NASDAQ 4,712.97 +11.1030 0.24%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs