As Ford Stock Drops, Does Kerkorian Have Second Thoughts On His Offer?

Implications: If billionaire investor Kirk Kerkorian didn't have enough takers on his offer to buy 20 million shares of Ford Motor Co. stock at $8.50 apiece, he might face a stampede now.

Analysis: On Thursday, shares of Ford closed at $7.16, down 8.2% from Wednesday. With Fords future looking increasingly difficult, Kerkorian's offer of $8.50 a sure looks like good deal.

Kerkorian already owns 100 million shares of Ford. If his offer succeeds, he would end up with a 5.5% share in the automaker and a powerful voice in its future.

That is, of course, if he is still looking to buy.

For now, Kerkorian's firm Tracinda, has not changed its offer to shareholders. However, the offer came with a back door that the firm could withdraw its offer under a variety of conditions, according to Tracinda's filing May 9 with the SEC. 

Shares of Ford had been trading between $7.50 a share and $8.40 a share since April 24, when Ford announced its surprise $100 million profit for the first quarter.

The performance followed a combined loss of $15.2 billion over the past two years and encouraged many to believe Ford's turnaround was firmly in hand.

That apparently included Kerkorian, who on April 28 revealed he had been quietly buying Ford shares and said he intended to make a cash tender offer for more.

The offer included praise for Ford's management team, giving them credit for achieving meaningful traction in a difficult marketplace.

Given Kerkorians frustrated efforts to take over Chrysler Corp. in 1995 and to influence General Motors Corp. a few years ago, his announcement bolstered interest in Ford and helped drive up the share price.

Tracinda Corp.' offer to Ford shareholders expires at 5p.m. June 9, and Ford's board of directors said Thursday it would remain neutral on whether shareholders should sell their holdings to Kerkorian's company.