SAN FRANCISCO (MarketWatch) - General Motors shares extended earlier losses in after-hours trading Tuesday on word that Kirk Kerkorian, in the hole for millions with his investment in the troubled automaker, cut his stake to 7.8% from 9.9%.

Tracinda Corp., Kerkorian's investment group, sold the stock so it could use a capital loss to maximize tax savings prior to the end of its fiscal year, according to a filing with the Securities and Exchange Commission, adding it wouldn't rule out repurchasing the shares as long as such a move did not carry a tax burden.

It is unclear how much of Kerkorian's fortune was pumped into GM, but he publicly set out in May to build his investment, offering to snap up available shares at $31 each, a 13% premium at the time.

GM's shares, slammed by the company's shrinking market share and fears of a possible bankruptcy, have lost 47% of their value so far this year, leaving investors like Tracinda just a few days to take advantage of losses for 2005 tax purposes.