General Motors (GM) stock is shooting higher by $5 to just under $33 today after Kirk Kerkorian offered to tender 28 million shares at $31 each. Kerkorian's Tracinda Corp already owns 22 million shares, which it bought recently at $26.33. Tracinda's one day gain on its nearly 4% stake stands at $110 million as I write this.

This move is really a brilliant one for Kerkorian. He was well aware that hedge fund managers were shorting GM stock for a variety of reasons, including as a way to hedge long positions in GM debt securities. Short covering is explaining most of this move higher. With GM stock higher than $31 on this move, Tracinda would get no takers on its $31 tender offer, and therefore has made a nice profit on no incremental investment.

The reality is that this offer does nothing to change GM's fundamental outlook. Therefore, one can argue this $5 move in the stock is not totally justified. I don't own GM stock, but if I did I would be tempted to sell some here at $33 a share.