General Motors investor Kirk Kerkorian knows a thing or two about buying low and selling high. He might explain the idea to GM.
GM is losing a bundle selling its 20 percent stake in Subaru parent Fuji Heavy Industries Ltd.
GM originally paid $1.3 billion for 157 million shares of Fuji stock in 1999, or about $8.28 a share.
Since then, the automaker calculated that the holding had appreciated in value to $1.5 billion, or $9.55 a share.
To get out of the deal this month, GM agreed to sell 68 million of its shares to Toyota Motor Corp. for $315 million, or $4.63 a share. Fuji is buying back the remaining 89 million shares, a move that gives GM another $412 million.
GM's total recoup: $727 million, or $773 million less than GM's booked value.
And, after six years of talking about the benefit of partnering with Subaru on product development, shared production and all-wheel-drive technology, GM has little to take away from the deal.
GM was planning to build a Saab crossover at Fuji's U.S. plant in Lafayette, Ind. But no GM work had ever been done there. Canceling the Saab project is going to cost Fuji about $43 million. That's the write-off Fuji has claimed so far for scrapping the development project.