Billionaire activist investor Kirk Kerkorian is making waves Monday by announcing that his Tracinda Corp. not only has amassed 100 million shares of Ford Motor Company (NYSE: F), but that he is making an additional offer of $8.50 per share for another 20 million shares.

Worth more than $18 billion largely from plays in Las Vegas, Kerkorian nonetheless has a history of entangling himself with other Detroit automakers like General Motors Corp. (NYSE: GM) and Chrysler. This announcement is a signal that he has faith in the turnaround efforts of Ford CEO Alan Mulally.

With the purchase of an additional 20 million shares, Kerkorian would have more than a 5% stake in Ford, a company still dominated by family interests. Despite going public in 1956, the descendants of Henry Ford still control 40% of the voting rights in the company - and given their track record, this almost definitively rules out and acquisition. This is important because such a rapid accumulation of shares by an outsider is often a build-up to a take-over attempt.

Kerkorian's logic in building such a large stake in Ford remain somewhat mysterious. Though the company reported a surprising first quarter profit, it still expects to lose money overall in 2008. Ford's truck and SUV-dependent lineup continue to be a huge liability with record gas prices.

According to a release Kerkorian, though his company, said "Tracinda has been following Ford closely since the company released its fourth quarter 2007 results which indicated that Ford’s management was starting to achieve highly meaningful traction in its turnaround efforts. Last week this was reinforced by Ford's first quarter 2008 results, achieved despite the difficult U.S. economic environment. Tracinda believes that Ford management under the leadership of Chief Executive Officer Alan Mulally will continue to show significant improvements in its results going forward."

Whether Kerkorian proves to be right, only time will tell, but for now Ford faces an uphill battle.

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RadioShack Corporation (NYSE: RSH) shares fell more than ten percent on the day after the company posted a sharp drop in first quarter earnings. The electronics retailer reported that its profits fell 9 percent, hurt by weak results from its Sprint wireless partnership. Meanwhile, sales fell four percent but managed to come in ahead of expectations.

"We are pleased with the overall outcome for the first quarter of 2008, especially in light of the difficult economic environment. After a very challenging month of January, our sales and earnings trends improved significantly during February and March, resulting in an average comp store sales decrease of 1.2% for the two months," said Julian Day, Chairman and Chief Executive Officer.

The real driver that brought the stock down were bearish comments made by analysts. They noted that the company's lack of a sales pullback was impressive, but it came at a cost. Operating margins missed forecasts and declined for the first time in six quarters. Meanwhile, inventory growth outpaced cost-of-goods sold growth for the first time in eight quarters.

RadioShack has been working to effect a turnaround in recent months, having closed some 500 stores and trimmed other expenses. Analysts noted that these changes have resulted in better stores, but the items in these stories still suffer from lower gross margins and could prove to be a barrier to gross profit dollar growth.

In the end, RadioShack may not seem to be affected by the recession given its better-than-expected sales and earnings, but a quick look beneath the hood unveils continued problems with operating margins that are only exacerbated by issues with its Sprint partnership. Combined, these factors led to today's drop in shares.

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ExpressJet Holdings Inc. (NYSE: XJT) today announced that it unanimously rejected an all-cash offer by SkyWest Inc. (NASDAQ: SKYW) to acquire the company for $3.50 per share.

ExpressJet said it believes SkyWest's $3.50 per share offer substantially undervalues the company's true value and outlook. "The initial SkyWest offer is inadequate and represents an opportunistic attempt by SkyWest to acquire the company at a price well below the true value that ExpressJet would bring to a combination," ExpressJet said in a statement.

With the difficulty across airline companies reflected in their current trading price - Skywest is trading near its 52 week low and ExpressJet was hovering around its 52 week low prior to this announcement - consolidation has become an attractive option based not only on valuations but long-term survival.

SkyWest's offer represents almost a 70% percent premium over ExpressJet's Thursday closing price of $2.09 per share and values the company at nearly $182 million. SkyWest CEO Jerry C. Atkin said in a letter to ExpressJet that the offer represented a "full and fair price" for the company.

Atkin wrote, "We believe that our proposal would be in the best interests of ExpressJet and its stockholders, particularly given the uncertainty in the airline sector, the high price of oil and, as outlined in your public filings, the risks of your business related to your relationship with Continental."

The risks of ExpressJet's relationship with Continental Airlines (NYSE: CAL) stem from ExpressJet mainly operating regional flights as a contractor for the company rather than having its own routes and name recognition. In other words, the company is largely at Continental's mercy right now.

ExpressJet is going to start a review of its options, but in this climate the reality is SkyWest's offer may be as good as it gets for a small, regional carrier like ExpressJet.

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