DETROIT -- Billionaire investor Kirk Kerkorian has sold part of his 6.5 percent stake in Ford Motor Co. and may sell the rest as he steers his investments away from the auto industry.

Kerkorian's Tracinda Corp., which had invested about $1 billion in the money-losing automaker, said in a regulatory filing that it sold 7.3 million shares yesterday in the open market for an average price of $2.43 per share. Tracinda will focus on the gaming, hospitality and oil and gas industries.

"In this bear market, it's easy to make money by buying healthy companies trading at deep discounts," Shelly Lombard, an analyst with bond-research firm Gimme Credit, said in a research note. "Who needs the aggravation of trying to turn around a distressed company in a troubled industry in the middle of an economic downturn?"

A Kerkorian pullout would deprive Ford of a high-profile supporter of CEO Alan Mulally's turnaround plan. Ford shares rose 10 percent the day Kerkorian disclosed his initial 4.7 percent stake on April 28.

The stock has plunged more than 60 percent since June, when Kerkorian, 91, paid as much as $8.50 a share to boost his holdings to 6.5 percent. The average price paid by Kerkorian was $7.07, according to Bloomberg News. The stock closed the day at $2.17, down 16 cents or 6.8 percent.

Tracinda said market conditions and available sales prices will determine whether it sells all of its remaining 133.5 million Ford shares. It has contacted an investment banking firm regarding the possible sale.

Last week Tracinda pledged another 50 million shares of casino operator MGM Mirage as collateral for a $600 million credit line used to buy Ford shares. The move came on top of 50 million MGM shares used to secure the credit line.

Troubled markets

Frozen credit markets will dramatically lower U.S. vehicle sales and increase losses at Ford, a J.P. Morgan analyst said today.

In a note to investors, analyst Himanshu Patel said that for the fourth quarter, U.S. light-vehicle sales could come in at a seasonally adjusted annual rate of 10 million to 11 million units. In 2009, industry sales could be "no better" than 11 million to 12 million, he said.

U.S. auto sales have averaged 16.8 million annually this decade through last year. For all of 2008, Patel now estimates Ford will lose $3.20 per share, up from a previous estimate of $3. He projects Ford's 2009 loss will be $1.90 per share, up from 95 cents.

The automaker's U.S. sales are down 17 percent in the first nine months of the year, a steeper decline than the industry's 13 percent drop.

Management and board turnover

Last week, two outside directors quit Ford's board, citing the increased demands of running their own companies. Two weeks ago, Ford said CFO Don Leclair, 56, will retire Nov. 1 and be replaced by Ford of Europe chief Lewis Booth, 59.

"We remain confident and focused on our plan to transform Ford into a profitably growing automaker," Ford spokesman Mark Truby said.

Kerkorian, a longtime activist investor in the auto industry, surprised analysts and Ford executives with his April announcement that he had begun to acquire a stake in the automaker. He also became the largest individual shareholder in GM in 2006. He later sold his shares after failing to force GM into an alliance with Nissan Motor Co. and Renault SA.

The Ford family holds a 3 percent stake in the company but controls 40 percent of the voting power because of a separate class of shares established when the company went public in 1956.

Amy Wilson and Reuters contributed to this report

PRESS RELEASE: Tracinda to Focus on Gaming & Hospitality and Oil & Gas Industries and Reduce Ford Holdings

LOS ANGELES -- October 21, 2008

Tracinda Corporation today announced that in light of current economic and market conditions, it sees unique value in the gaming and hospitality and oil and gas industries and has, therefore, decided to reallocate its resources and to focus on those industries.

Accordingly, Tracinda stated that on October 20, 2008, it sold 7.3 million shares of the common stock of Ford Motor Company (NYSE: F) in the open market for an average price of $2.43 per share, before commissions. Tracinda also stated that it intends to further reduce its holdings of Ford common stock, including the possible sale of all of its remaining 133,500,000 shares (approximately 6.09% of the outstanding shares), depending upon market conditions and available sales prices, and that it has contacted an investment banking firm regarding the possible sale of such shares.