Financier Kirk Kerkorian has made more than $150 million in "paper" profit during the first two days of over-the-counter trading in stock of his new United Artists Corp.
Although the stock can't be issued before next week, trading has begun in the shares on a "when-issued" basis. And in two days, its value increased from the $9 a share that Kerkorian is paying for his 80% stake of about 42.6 million shares to the closing market price Wednesday of $12.625 a share. That represents a 40% increase in the value of Kerkorian's stake.
The UA stock cannot be issued until the closing of the $2.25-billion merger of Culver City-based MGM/UA Entertainment Co. and Turner Broadcasting System and the simultaneous sale of the UA subsidiary to Kerkorian and other former MGM/UA stockholders for about $480 million. The closing is set for Tuesday.
Of the $480 million, Kerkorian will pay about $384 million for his 80% interest. Former MGM/UA stockholders will own about 14% and Kerkorian's new UA management about 6%. They, too, have made 40% paper profits before even becoming official owners of UA shares.