MGM share price plummets with biggest drop in 5 years as billionaire Kirk Kerkorian cuts ownership

Associated Press are reporting that shares in Metro-Goldwyn-Mayer - owners of the Bond franchise - plunged more than 17 percent Tuesday after its principal owner, billionaire Kirk Kerkorian, said he intends to sell 28.75 million of his MGM shares to generate a tax loss.

Kerkorian`s stake in MGM will drop from 77.3 percent to 67.3 percent after the sale.

The sale is an about-face for Kerkorian, who just last July said he would repurchase up to 10 million shares because they were undervalued.

Kerkorian has also been trying to sell the company for more than a year.

MGM shares sank on the news, trading down 19.3 percent to $11.31 in afternoon New York Stock Exchange action, the stock`s worst one-day decline since its November 1997 flotation.

A drop in the share price was expected because of the dilutive effect of adding another 28 million shares to the public float.

But investors may also be reacting to conflicting guidance issued by the company Tuesday, including revenue and earnings estimates far above what analysts had been expecting.

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