Dubai Dumps Chrysler (DCX)
It is never good news when one of your largest and smartest shareholders decides to sell and tell the news media about it before they begin.
Dubai International Capital said that it may sell some of its DaimlerChrysler shares. They have 20 million shares which they have held a little under two years, and they are ahead on their investment.
The announcement would appear to be a case of momentary stupidity on the part of Dubai. Let’s announce that we may sell a bunch of shares and drive the stock price down. Then, we can sell them for less.
Aside from this lapse in judgment, Dubai may be making the right move. Daimler management may be so frustrated with turning around its US unit that investors are worried that the parent’s results may continue to be dragged down.
The head of Chrysler has indicated that his job may be on the line.
On November 1, forty-five percent of the inventory at Chrysler dealers was 2006 model’s, an unusually high figure if the 2007 need to get onto lots. Chrysler management simply overproduced vehicles into the jaws of poor sales.
Someone blundered and Dubai wants out.
Douglas A. McInyre can be reached at douglasamcintyre@247wallst.com. He does not own securities in companies that he writes about.
Dubai International Capital said that it may sell some of its DaimlerChrysler shares. They have 20 million shares which they have held a little under two years, and they are ahead on their investment.
The announcement would appear to be a case of momentary stupidity on the part of Dubai. Let’s announce that we may sell a bunch of shares and drive the stock price down. Then, we can sell them for less.
Aside from this lapse in judgment, Dubai may be making the right move. Daimler management may be so frustrated with turning around its US unit that investors are worried that the parent’s results may continue to be dragged down.
The head of Chrysler has indicated that his job may be on the line.
On November 1, forty-five percent of the inventory at Chrysler dealers was 2006 model’s, an unusually high figure if the 2007 need to get onto lots. Chrysler management simply overproduced vehicles into the jaws of poor sales.
Someone blundered and Dubai wants out.
Douglas A. McInyre can be reached at douglasamcintyre@247wallst.com. He does not own securities in companies that he writes about.
posted by douglas mcintyre at 4:45 AM
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