enron mentions usa : enron shares hit lowest level since july 1992 .
reuters english news service - 10 / 30 / 01
wolf haldenstein law firm announces class action suit on behalf of purchasers of only enron non - common - equity stock , including preferred and preferred - related stock , against enron corp .
business wire - 10 / 30 / 01
uk : uk power prices lower as mild weather hits demand
reuters english news service - 10 / 30 / 01
stocks close lower as investors react to economic data
dow jones business news - 10 / 30 / 01
enron shares fall a day after moody ' s lowers rating ( correct )
bloomberg - 10 / 30 / 01
epdc to spend $ 500 mln abroad as japan deregulates power market
bloomberg - 10 / 30 / 01
enron default insurance signals eroding confidence ( update 5 )
bloomberg - 10 / 30 / 01
u . s . equity movers : anthem , cvs , enron , hispanic broadcasting
bloomberg - 10 / 30 / 01
enron chairman weathers a storm : many in houston believe lay can get
firm back on track ( business )
the dallas morning news - 10 / 30 / 01
usa : enron shares hit lowest level since july 1992 .
10 / 30 / 2001
reuters english news service
( c ) reuters limited 2001 .
houston , oct 30 ( reuters ) - shares of enron corp . on tuesday dropped to their lowest level in more than nine years on tuesday , a day after the embattled energy giant said it was seeking fresh credit and a rating agency cut some of the company ' s debt to two notches above junk status .
enron ' s stock was down $ 2 . 86 , or 20 . 7 percent , at $ 10 . 95 in late trading on the new york stock exchange , extending the company ' s losing streak to a 10 th straight day . the last time the shares traded below $ 11 was in july 1992 .
after cutting enron ' s rating on monday , moody ' s investors service warned that it could lower the rating on the company ' s senior unsecured debt even further , as well as cut enron ' s short - term debt status .
houston - based enron has lost more than $ 15 billion in market capitalization in the past two weeks amid a series of disclosures about off - balance - sheet deals with partnerships run by its former chief financial officer who was replaced last week .
the wall street journal said in its tuesday edition that the u . s . securities and exchange commission ( sec ) had moved an inquiry about the deals from its regional office in fort worth , texas , to its washington d . c . headquarters , indicating that the probe is being treated as a high priority .
copyright ? 2000 dow jones & company , inc . all rights reserved .
wolf haldenstein law firm announces class action suit on behalf of purchasers of only enron non - common - equity stock , including preferred and preferred - related stock , against enron corp .
10 / 30 / 2001
business wire
( copyright ( c ) 2001 , business wire )
new york - - ( business wire ) - - oct . 30 , 2001 - - the following is an announcement from the law firm of wolf haldenstein adler freeman & herz llp :
wolf haldenstein adler freeman ( 2 ) enron was failure to write - down impaired assets on a timely basis in accordance with gaap ; and ( 3 ) the company ' s operating results were materially overstated as a result of the company ' s failing to timely write - down the value of its investments with certain limited partnerships , including those described above . on october 16 , 2001 , enron surprised the market by announcing that in the third quarter of 2001 , the company was taking non - recurring charges of $ 1 . 01 billion after tax ( $ 1 . 11 per diluted share ) . enron failed to clearly disclose until october 18 that it also was taking a $ 1 . 2 billion writedown in shareholders ' equity as a result of unwinding the investments with the limited partnerships controlled by mr . fastow . since the announcement of the $ 1 . 2 billion writedown in shareholders ' equity , the market price of enron preferred securities has dropped significantly .
this lawsuit is brought on behalf of only the preferred shareholders of enron , which include among others the following classes of stock :
1 . enron capital llc , 8 . 00 % , 11 / 30 / 43 series , 8 million shares
outstanding , traded on the new york stock exchange .
2 . enron capital trust i , 8 . 3 % series , 8 million shares
outstanding , traded on the new york stock exchange .
3 . enron capital trust ii , 8 . 1250 % series ( preferred r ) , 6
million shares outstanding , traded on the new york stock
exchange .
4 . enron capital trust iii , 200 , 000 shares outstanding .
5 . enron capital resources lp , 9 . 0 % , 8 / 31 / 24 series a , 3 million
shares outstanding , traded on the new york stock exchange .
6 . portland general electric , 7 . 75 % , 6 / 15 / 07 series , 300 , 000
shares outstanding , traded on the nasdaq .
7 . portland general electric , 8 . 25 % , 12 / 31 / 35 series a , 3 million
shares outstanding , traded on the new york stock exchange .
purchasers of convertible preferred stock are not included in the class .
plaintiff seeks to recover damages on behalf of all those who purchased or otherwise acquired enron preferred securities . if you purchased or otherwise acquired enron preferred securities during the class period , and either lost money on the transaction or still hold the securities , you may wish to join in the action to serve as lead plaintiff . if you purchased enron preferred securities during the class period , you may , no later than december 21 , 2001 , request that the court appoint you as lead plaintiff . a lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation . in order to be appointed lead plaintiff , the court must determine the class member ' s claim is typical of the claims of other class members , and that the class member will adequately represent the class . under certain circumstances , one or more class members may together serve as " lead plaintiffs . " your ability to share in any recovery is not , however , affected by the decision whether or not to serve as a lead plaintiff . you may retain wolf haldenstein , or other counsel of your choice , to serve as your counsel in this action . although you may contact and retain as your counsel one of the law firms which are representing common stock shareholders in related litigations , we recommend that anyone who owns preferred securities should contact attorneys who will only represent preferred shareholders .
wolf haldenstein has extensive experience in the prosecution of securities class actions and derivative litigation in state and federal trial and appellate courts across the country . the firm has approximately 60 attorneys in various practice areas ; and offices in chicago , new jersey , new york city , san diego , and west palm beach . the reputation and expertise of this firm in shareholder and other class litigation has been repeatedly recognized by the courts , which have appointed it to major positions in complex securities , multi - district and consolidated litigation .
if you interested in being included in our action or serving as one of the lead plaintiffs , please contact wolf haldenstein adler freeman & herz llp at 270 madison avenue , new york , new york 10016 , by telephone at ( 800 ) 575 - 0735 ( george peters , derek behnke , robert b . weintraub , esq . , jeffrey g . smith , esq . , daniel w . krasner , esq . ) , via e - mail at classmember @ whafh . com or visit our website at http : / / www . whafh . com . your e - mail should refer to enron preferred securities .
contact : wolf haldenstein adler freeman & herz llp , new york george peters , derek behnke , robert b . weintraub jeffrey g . smith , daniel w . krasner 800 / 575 - 0735
15 : 43 est october 30 , 2001
copyright ? 2000 dow jones & company , inc . all rights reserved .
uk : uk power prices lower as mild weather hits demand .
10 / 30 / 2001
reuters english news service
( c ) reuters limited 2001 .
london , oct 30 ( reuters ) - uk electricity prices dipped on tuesday , pressured by a sagging prompt market as mild weather dented demand .
liquidity fell as around 10 companies kept on hold their dealings with u . s . group enron as they reviewed their credit arrangements with the troubled company .
" there have been a few problems with liquidity , there aren ' t as many prices out there , but it ' s not serious , " said one trader .
enron , mainly via its enrononline internet platform is one of the uk market ' s biggest traders .
day ahead baseload last traded around 15 . 20 pounds a megawatt hour , down five pounds from the previous close . it was offered at 15 . 45 pounds at the close .
traders blamed lower - than - expected demand due to warm weather for prompt market weakness .
national grid said demand through to the middle of last week was about two percent down on the same period last year .
december baseload also fell sharply , assessed around 19 . 05 pounds , down 70 pence .
forward curve prices also dropped as a bearish tone took hold across the market .
summer 02 baseload was down about 10 pence at 17 . 32 pounds and winter 02 baseload shed 20 pence to 19 . 70 pounds .
copyright ? 2000 dow jones & company , inc . all rights reserved .
stocks close lower as investors react to economic data
by erin schulte
10 / 30 / 2001
dow jones business news
( copyright ( c ) 2001 , dow jones at one point , the average had been down more than 200 points . the nasdaq composite index dropped 32 . 11 , or 1 . 9 % , to 1667 . 41 after tumbling 69 . 44 on monday .
other indexes also lost ground . the s economists surveyed by thomson global markets had expected an october reading of 96 .
this month ' s report was previously cited by bond - market strategists as an indicator of particular importance to gauge the response of consumers in the weeks following the sept . 11 terrorist attacks on new york and washington , but also the level of confidence as the u . s . continues to face the threat of anthrax .
ian shepherdson , chief u . s . economist for high frequency economics , said the number was " in short , awful . " however , he added , much of the decline could be blamed on the present - situation number , which tumbled to 107 . 6 from 125 . 4 .
" if there is any saving grace in these numbers it is that the present - situation index , which tells us little about future spending , fell by much more than the expectations number , which does have real forward - looking value , " he said . the expectations number dropped to 70 . 8 from 78 . 1
the consumer - confidence report is one of several key indicators due out this week .
on wednesday , the bureau of economic analysis will report on third - quarter gross domestic product . on thursday , the national association of purchasing management will report on how the manufacturing sector fared in october , and the labor department ' s closely watched monthly unemployment data will be released friday .
selling in key international markets also pressured wall street . frankfurt ' s dax was down 2 . 5 % , while london ' s financial times - stock exchange 100 - share index was down 1 . 6 % . earlier , japan ' s nikkei 225 average closed with a loss of 0 . 94 % , and hong kong ' s hang seng index fell 1 % .
among stocks to watch , cvs was one of the big board ' s biggest losers , tumbling 23 % after the drugstore chain posted a 23 % decline in third - quarter net income and unveiled a restructuring plan that includes the shutdown of about 200 stores in the first quarter of next year .
also , merrill lynch cut the company ' s long - term rating to " accumulate " from " buy . "
" shrinkage , poor general merchandise sales and supermarket - type discounting are all robbing the company of a vital year - end gross - margin flourish , " said merrill lynch analyst mark husson . " while these problems are fixable , we believe there is not much for investors to get excited about in the intermediate - term . "
rite aid and walgreen ' s followed cvs ' s path lower , declining 9 . 5 % and 2 . 7 % respectively after merrill lynch cut their long - term ratings to " accumulate " from " buy . "
dow component eastman kodak was the biggest loser of the industrial average , sinking 6 . 9 % after lehman brothers said wal - mart stores was ready to unveil a private - label film offering , which could hurt sales for kodak ' s film .
mcdonald ' s also was a big loser among dow industrial components , giving up 4 . 7 % after the fast - food chain cut its earnings guidance for 2002 to an improvement of between 5 % to 10 % , well below traditional double - digit guidance . the company also said it will take a charge in the current quarter to cover restructuring .
and dow component philip morris lost 4 % after goldman sachs analyst marc cohen removed the tobacco giant from his " recommended for purchase " list and lowered the 2002 earnings estimate to $ 4 . 45 a share from $ 4 . 53 , which represents 10 % profit growth instead of previously expected growth of 12 % .
enron shares tumbled 19 % as credit concerns persisted about the houston energy - trading company . moody ' s investors service lowered its ratings by one notch on the company ' s senior unsecured debt and kept the company under review for a possible further downgrade . and the securities and exchange commission has moved its inquiry into enron ' s finances to the agency ' s washington headquarters from a regional office .
in major u . s . market action :
stocks fell . on the big board , where 1 . 30 billion shares traded , 2 , 159 stocks fell and 943 rose . on the nasdaq , 1 . 79 billion shares traded hands .
bonds gained . the 10 - year treasury note rose more than 1 / 2 point , or $ 5 for each $ 1 , 000 invested . the yield , which moves inversely to price , fell to 4 . 416 % . the 30 - year bond was up 3 / 4 point to yield 5 . 215 % .
the dollar was mixed . it traded at 121 . 94 yen , down from 122 . 97 late monday , while the euro fell against the dollar to 90 . 46 u . s . cents from 90 . 48 .
copyright ( c ) 2001 dow jones & company , inc .
all rights reserved .
copyright ? 2000 dow jones & company , inc . all rights reserved .
enron shares fall a day after moody ' s lowers rating ( correct )
2001 - 10 - 30 16 : 48 ( new york )
enron shares fall a day after moody ' s lowers rating ( correct )
( corrects today ' s low price in second paragraph . )
houston , oct . 30 ( bloomberg ) - - enron corp . shares fell 19
percent after touching the lowest level in more than nine years , a
day after moody ' s investors service placed the largest energy
trader ' s rating for commercial paper on review for downgrade and
lowered its long - term debt to two notches above junk status .
shares of enron dropped $ 2 . 65 to $ 11 . 16 . earlier , the stock
fell to $ 10 . 90 , the lowest since july 1992 . the stock , down for
the 10 th day in a row , has tumbled 87 percent this year .
moody ' s lowered enron ' s long - term credit rating to ` ` baa 2 ' '
from ` ` baal ' ' yesterday . it also placed the company ' s ` ` p - 2 ' '
rating for commercial paper on review for possible downgrade .
` ` i think investors would have loved to have no downgrade or
a more stable outlook for the company , ' ' commerzbank securities
analyst andre meade said . ` ` moody ' s left some uncertainty . ' '
meade doesn ' t own enron shares and rates the company
` ` accumulate . ' '
executives from exelon corp . , american electric power co . and
northeast utilities said they still are trading with enron .
` watching closely '
` ` nervous is probably not the right word , but we are watching
very closely , ' ' aep chief executive officer linn draper said at an
energy conference in new orleans . ` ` we are focusing our new deals
with them in the short term , november and december , ' '
columbus , ohio - based aep is the biggest u . s . electricity
generator . traders often buy and sell power for delivery the next
day or for over a week , month , quarter or calendar year . the
bloomberg energy service is quoting power prices for as far ahead
as september 2003 .
` ` we are keeping a close eye on our exposure , ' ' exelon corp .
co - chief executive officer john rowe said at the conference . ` ` we
are keeping a tight dollar limit on trades . ' ' he declined to
provide specifics .
chicago - based exelon is the biggest u . s . nuclear - power
producer .
` ` three weeks ago , we started monitoring our position with
enron , ' ' northeast chief financial officer john forsgren said at
the conference . ` ` right now , we have a net payable to them , so
there ' s no exposure on our side , and we ' ll probably keep it that
way . ' '
northeast , based in berlin , connecticut , will continue to
trade with enron as long as its debt ratings remain investment
grade , forsgren said . northeast is new england ' s biggest utility
owner .
sec inquiry
the wall street journal reported that a u . s . securities and
exchange commission inquiry into enron ' s financial dealings with
affiliates , run by the company ' s former chief financial officer
andrew fastow , has moved to washington , signaling the
investigation has become more serious .
investors say they are worried about $ 3 . 3 billion in
liabilities from the affiliates , which were formed to buy and sell
enron assets . houston - based enron ousted fastow on wednesday amid
the sec inquiry into the partnerships he ran that cost the company
at least $ 35 million .
other energy stocks also fell today as the price of natural
gas on the new york mercantile exchange dropped as much as 3 . 7
percent . the standard and
19 percent of a 700 megawatt plant run by thai oil power co . epdc
is also building in thailand its first biomass plant outside
japan , which uses agricultural waste as fuel .
favorite destination
` ` thailand is our favorite destination because we believe
political risk there is almost zero , ' ' said epdc ' s takaraya .
` ` still , it ' s a little bit dangerous to concentrate our
portfolio in one country . ' ' the next acquisition may be a stake in
a gas - fired power plant in the philippines , he said .
epdc ' s overseas campaign demonstrates japan ' s change in
policy . the company was set up in 1952 to build hydro and coal -
fired power stations to reduce dependence on oil - fired power and
help meet increasing demand from industrial growth . its 58
hydropower plants and eight thermal stations are able to generate
as much as 16 , 015 megawatts , or 6 . 4 percent of the country ' s
capacity .
epdc ' s sales for the year ended march rose 10 percent to $ 4 . 1
billion , while gross profit rose 7 percent to $ 292 million .
in june 1997 , japan ' s cabinet decided to privatize the
company within five years as part of the proposed deregulation .
the sale , now expected in 2003 , would help cut the company ' s debt ,
which totaled 2 . 1 trillion yen ( $ 17 billion ) , or 30 times its
capital , in march .
japan ' s power producers , able to sell bonds paying as little
as 0 . 5 percent , are some of asia ' s biggest borrowers . tepco owed
7 . 76 trillion yen in long term debt in march .
epdc says it ' s aware of the political risks in investing in
asia and chooses markets carefully .
` ` it ' s not the time to go to indonesia , ' ' takaraya said .
enron default insurance signals eroding confidence ( update 5 )
2001 - 10 - 30 16 : 32 ( new york )
enron default insurance signals eroding confidence ( update 5 )
( adds background in 10 th paragraph . )
new york , oct . 30 ( bloomberg ) - - the price that investors pay
to protect against a bond default by enron corp . doubled this
week , reflecting on erosion of confidence in the biggest energy
trader . the shares plunged for a 10 th day .
to hedge against losses for the next 18 months , investors now
have to pay as much as 16 . 5 percent of the face value of bonds
they own . a week ago , such insurance cost 7 . 5 percent , according
to creditsights inc .
enron ` ` made a lot of people nervous and the concern is the
nervousness will seep into enron ' s operating business , ' ' said
austin ramzy , director of fixed income research at principal
capital income investors in des moines , iowa , which owns about
$ 190 million in enron bonds . ` ` the question of the day is whether
the crisis of confidence can be stopped . ' '
the increase in the price of so - called default swaps is
another reflection , along with a 65 percent decline in enron
shares in the past two weeks , that investors are losing confidence
in the company , analysts said .
enron shares , down 19 percent today to $ 11 . 16 , have fallen
every day since the company surprised investors by writing off
$ 1 . 2 billion of assets on oct . 17 .
enron ' s 6 . 4 percent coupon bonds due in 2006 were bid at 73
cents on the dollar , traders said , down as much as 7 cents from
yesterday ' s price of 80 cents . the debt now yields 14 . 5 percent ,
up from 12 . 1 percent yesterday and 10 . 8 percent on friday .
exposure
` ` banks wanting to hedge risk are pushing the price higher , ' '
said andy palmer , who doesn ' t own enron bonds in the $ 1 . 25 billion
he helps manage at asb capital management inc .
enron default protection has risen from less than 3 percent
per year , a price that is common for similarly rated companies .
other energy traders ' such as williams cos . inc . and dynegy inc .
both have default insurance premiums below 2 percent per year ,
traders said .
the increase in enron ' s credit default swaps ` ` may be
overstating the default risk , ' ' said palmer . the purchasers of the
default swaps are mainly banks that have loan exposure to enron
and ` ` banks are not as price - sensitive as institutional
investors , ' ' said palmer . ` ` they just want to get the exposure off
their books . ' '
principal capital , which is an institutional investor , said
did not buy protection for its $ 190 million of enron bonds .
john tompkins , a trader at credittrade , a credit derivatives
brokerage , said there ' s interest among buyers , though not sellers
of enron default swaps . he said there are bids for enron credit
default swaps at 7 to 8 percent annually for five years '
protection and 12 percent annually on the three years ' contract - -
with no offers .
enron credit was one of the world ' s biggest non - bank traders
of default insurance .
undisclosed
the largest energy trader ' s troubles began two weeks ago when
it reported $ 1 . 01 billion in losses , including more than $ 544
million written off on a competitive energy supplier business and
a bandwidth trading business .
enron formed at least 18 affiliated companies to buy and sell
company assets , according to records from the texas secretary of
state . some of those affiliates profited after enron used $ 1 . 2
billion of company stock to buy back assets from the partnership .
the houston - based company losses included $ 35 million from
partnerships set up by chief financial officer andrew fastow .
fastow was later fired as chief financial officer and the u . s .
securities and exchange commission has asked for information about
the transactions .
the disclosure has set off concern among investors about how
little is known about enron ' s balance sheet and caused ratings
companies to examine the company .
` ` investors are nervous about this name , ' ' said freda lam , a
fixed - income analyst at j . p . morgan chase & co . in new york .
investor relations
enron ' s long - term debt rating was cut yesterday to ` ` baa 2 , ' '
two levels above junk , from ` ` baal . ' ' moody ' s also placed the
houston - based company ' s ` ` p - 2 ' ' rating for commercial paper - -
borrowing for nine - months or less - - on review for downgrade .
enron has been shut off from the commercial paper market since the
ratings agencies began the review .
the lack of access to money markets makes it more difficult
for enron to borrow the short - term cash needed to run its trading
businesses . ahead of a potential cut , enron took out bank lines to
repay $ 2 billion in commercial paper last week .
still , many on wall street expects enron ' s bonds to be paid
and its stock price to bounce back .
` ` we suspect that enron ' s share price will not likely recover
in the near term , ' ' lam said . ` ` we ultimately expect this company
to be successful . but it needs to improve its investor relations
and its disclosure . ' '
u . s . equity movers : anthem , cvs , enron , hispanic broadcasting
2001 - 10 - 30 13 : 24 ( new york )
u . s . equity movers : anthem , cvs , enron , hispanic broadcasting
new york , oct . 30 ( bloomberg ) - - the following is a list of
companies whose shares are moving in u . s . markets monday , oct . 29 .
the stock symbol is in parentheses after the company name .
major moving stocks :
anthem inc . ( ath ) rose $ 4 . 57 , or 13 percent , to $ 40 . 57 and
traded as high as $ 40 . 80 . the health - benefits company raised $ 1 . 78
billion in its initial public offering .
cvs corp . ( cvs ) fell $ 8 . 01 , or 25 percent , to $ 23 . 61 and
traded as low as $ 23 . the drugstore chain said profit this year
will unexpectedly decline and it will close 200 stores and cut
jobs early next year .
other moving stocks :
crossworlds software inc . ( cwld ) rose $ 1 . 02 , or 29 percent ,
to $ 4 . 56 and traded as high as $ 4 . 58 . international business
machines corp . ( ibm ) agreed to buy the maker of electronic -
commerce software for $ 129 million in cash .
csg systems international inc . ( csgs ) fell $ 6 . 94 , or 18
percent , to $ 32 . 26 and traded as low as $ 30 . 40 . the provider of
billing services for cable - and satellite - television companies
expects 2002 earnings of $ 2 to $ 2 . 15 a share , which is lower than
the $ 2 . 48 average estimate of analysts polled by thomson
financial / first call .
ctc communications group inc . ( cptl ) fell 90 cents , or 13
percent , to $ 6 and traded as low as $ 5 . 26 . the provider of
telecommunications services doesn ' t expect to have positive
earnings before interest , taxes , depreciation and amortization
until the fourth quarter ending in march . that is one quarter
later than its previous estimate .
dycom industries inc . ( dy ) fell $ 1 . 40 , or 11 percent , to
$ 10 . 99 and traded as low as $ 10 . 75 . the provider of engineering
and construction services to telecommunications companies said
profit , excluding certain costs , in the first quarter ended
saturday was 13 cents to 15 cents a share . on that basis , which
isn ' t in accordance with generally accepted accounting principles ,
profit was 5 cents to 7 cents below expectations , the company said
in a statement distributed by pr newswire .
enron corp . ( ene ) fell $ 2 . 51 , or 18 percent , to $ 11 . 30 and
traded as low as $ 11 . 07 . the securities and exchange commission
will move its investigation of the energy trader to washington
from fort worth , texas , a sign the agency wants to make a quick
decision above whether to allege securities - law violations , the
wall street journal reported .
ensco international inc . ( esv ) fell $ 2 . 25 , or 10 percent , to
$ 20 . 32 and traded as low as $ 20 . the offshore oil driller was
downgraded to ` ` hold ' ' from ` ` add ' ' by abn amro securities llc
analyst matthew conlan .
hispanic broadcasting co . ( hsp ) fell $ 2 . 76 , or 15 percent , to
$ 15 . 25 and traded as low as $ 15 . 05 . the spanish - language
broadcaster said third - quarter profit fell to 8 cents a share from
12 cents a year earlier because it sold less advertising .
homestore . com inc . ( homs ) fell 74 cents , or 13 percent , to
$ 5 . 15 and traded as low as $ 4 . 86 . the internet real - estate listing
service was downgraded to ` ` market outperform ' ' from ` ` recommend
list ' ' by goldman , sachs & co . analyst anthony noto .
macrovision corp . ( mvsn ) fell $ 8 . 75 , or 26 percent , to $ 24 . 72
and traded as low as $ 23 . 80 . the maker of copyright - protection
software expects fourth - quarter revenue to be unchanged from the
$ 23 million it had in the third quarter . it was expected to have
sales of $ 31 . 5 million , the average estimate of four analysts
surveyed by first call .
mcdonald ' s corp . ( mcd ) fell for a second day , dropping $ 1 . 61 ,
or 5 . 9 percent , to $ 25 . 67 . the stock traded as low as $ 25 . 55 . the
fast - food chain yesterday said it will open 200 fewer restaurants
and buy back as much as $ 5 billion in stock , as the company tries
to turn around four quarters of falling profit .
odwalla inc . ( odwa ) rose $ 3 . 29 , or 28 percent , to $ 15 . 12 and
traded as high as $ 15 . 21 . coca - cola co . ( ko ) agreed to buy the
natural fruit - drink maker for $ 181 million in cash . coca - cola will
pay $ 15 . 25 a share for odwalla ' s common stock .
openwave systems inc . ( opwv ) fell $ 1 . 91 , or 21 percent , to
$ 7 . 08 and traded as low as $ 6 . 69 . the maker of software for
accessing the internet over mobile phones said sales in the second
quarter ending in december will be about $ 100 million , which is
less than the $ 123 . 4 million average estimate of analysts polled
by first call .
rehabcare group inc . ( rhb ) fell $ 13 . 48 , or 35 percent , to
$ 25 . 22 and traded as low as $ 23 . the manager of hospital
rehabilitation services said it will have fourth - quarter earnings
of 41 cents to 42 cents a share . the company had been expected to
earn 46 cents , the average estimate of six analysts polled by
first call .
royal caribbean cruises ltd . ( rcl ) rose $ 1 . 66 , or 18 percent ,
to $ 10 . 81 and traded as high as $ 10 . 95 . the cruise - line company
had third - quarter net income of 82 cents a share , compared with
the 72 - cent average estimate of analysts polled by first call .
sulzer medica ag ( sm ) american depositary shares , 10 of which
represent one share , fell $ 1 . 49 , or 35 percent , to $ 2 . 80 and
traded as low as $ 2 . 30 . the maker of orthopedic products said a
court will allow individual lawsuits over faulty hip and knee
implants , casting doubt on a plan for a group settlement .
enron chairman weathers a storm : many in houston believe lay can get
firm back on track ( business )
bruce nichols
10 / 28 / 2001
the dallas morning news lh
copyright 2001 gale group inc . all rights reserved . copyright 2001 the
dallas morning news , l . p .
houston - over the last 15 years , enron corp . has transformed itself
from a sleepy gas pipeline company into an energy trading giant .
chairman ken lay has changed along with it , from mere titan of
business to houston ' s leading citizen .
so when business reversals hit enron and mr . lay , the ripples are felt
throughout civic life in a city where he has held virtually every
leadership position and the corporate name graces the baseball stadium .
two months after his heir apparent resigned , mr . lay has seen his
company buffeted by investors and has had to oust his chief financial
officer .
the securities and exchange commission is looking into deals in which
the former cfo played dual roles with enron and a hedge group .
" my sense is it ' s probably a little too soon to tell what the impact
is with ken himself , " said bob eury , president of central houston inc . ,
a downtown development group .
a loss of his and enron ' s leadership " would be profound , " mr . eury
added , but most houstonians expect mr . lay to weather the company ' s
difficulties and continue his " marvelous leadership out in the
community . "
still , no one is going to be surprised if mr . lay is preoccupied for a
while .
" if the ship ' s on fire , you address that first , " said oilman george
strake , who has worked with mr . lay on civic projects .
mr . lay , 58 , returned to the chief executive ' s role in august when his
protege , jeffrey k . skilling , quit as ceo and president after only six
months on the job . and mr . lay cited those burdens last week when he
resigned as a director for i 2 technologies , the software developer based
in farmers branch .
" this is a very painful decision , " mr . lay said in a prepared
statement . " but now that i am again taking on the ceo responsibilities
at enron , i must reduce my outside activities . "
enron ' s fall has been hard .
from a 52 - week peak of $ 84 . 62 on dec . 28 , the stock has been tumbling
for months . it skidded all the way to $ 15 . 40 as of friday ' s close , about
half its value just two weeks earlier .
profits remain strong , but the company has announced write - downs of
key assets - totaling $ 1 . 01 billion in after - tax nonrecurring expenses -
and wall street analysts have turned coldly skeptical , if not hostile .
mounting troubles
enron confirmed the securities and exchange commission inquiry into
deals involving the just - departed cfo , andrew fastow . under pressure ,
enron replaced him wednesday .
there have been other troubles , too . as lead advocate for electricity
market restructuring , enron found itself under furious attack during
california ' s energy crisis last spring . investments in communications
and water businesses soured . a huge power plant project in india has
become a problem .
mr . lay has said all the concern is misplaced .
" to say the least , we are . . . disappointed with our stock price , " he
told investors last week . but " our businesses are performing very well ,
and we ' re continuing to conduct business as usual . "
as for the sec ' s interest , " we welcome . . . the opportunity it provides
us to put these matters to rest , " he said .
skepticism that mr . lay can pull enron back into the middle of the
road exists in houston .
but the doubters don ' t want to be quoted by name and are not
necessarily betting against him , considering his past successes .
in houston , " nobody ' s dancing on his grave , " said lawyer david berg ,
who ' s active in civic and political affairs . " there ' s a lot of residual
respect for ken lay , and it ' s not going to go away even if he goes
bankrupt , but that isn ' t going to happen . "
wall street reaction
financier charles miller , a wall street veteran , said analysts appear
to be ganging up on enron , with a few making " indefensible " comments
that might be criminal if made about a bank .
" wall street may be envious of the fact that , from the trading
standpoint , he may have made one of the most profitable trading
operations in the history of the world and , from all i can tell , very
soundly , " mr . miller said .
from wall street comes a different interpretation : after the exit of
two top executives in two months , the company ' s other problems , and the
sec ' s inquiry , it ' s time for more information from the company .
" they ' ve breached the confidence level with one thing after another , "
said john parry , analyst with john s . herold inc .
the 1980 s oil , banking , and real estate busts have colored houston ' s
attitude toward business reversals , some say .
having seen fortunes rise , fall , and rise again in the ' 90 s , houston
is less likely to lose leaders to temporary setbacks , energy banker
matthew simmons said .
" most cities , if you ' re new or if you ' re struggling , you ' re shut out , "
mr . simmons said . not houston , and " i think that ' s its genius . "
real estate investor ned holmes recalled that when exxon corp .
suffered through the 1989 alaska oil spill , the chamber of commerce
threw a reception to express support and appreciation for the company ' s
civic contributions .
" we all turned out and told them that . . . we know this is a difficult
deal , but they ' re an important part of this community and we ' re not
turning our back on them , " mr . holmes said . " people feel every bit as
strongly , if not more so , about ken . "
it ' s hard to overstate the importance of mr . lay and enron in houston .
he chaired or co - chaired committees leading houston in playing host to
the g - 7 summit in 1990 and the republican national convention in 1992 .
he chaired the university of houston board of regents .
when plans for a new baseball stadium hit a snag in the mid - 1990 s , he
assembled a group of investors to buy the land and facilitate a deal
that led to voter approval . enron then bought the naming rights to the
astros ' new home , enron field .
mr . lay helped lead efforts to win voter approval of a new basketball
arena , now under construction . he has backed rail transit and other
measures to clean houston ' s air .
he and his wife , linda , have been active in charities and have
supported political candidates .
new model
in reinventing itself into a $ 100 billion - a - year energy trader , enron
created a business model that other energy companies have followed ,
making houston a leader in a new kind of commodities market .
enron , whose influence extends into the white house of president bush ,
is in the midst of adding to houston ' s skyline , building a 40 - story
building next door to the 50 - story building it already occupies .
losing mr . lay ' s and enron ' s leadership " would be a sizable blow , "
said jim kollaer , president of the greater houston partnership , a
business - boosting group that includes the chamber of commerce . but " he
hasn ' t pulled back . "
" he has to be there to answer these questions . he ' s going to take time
to do that , " mr . kollaer said . " but he ' s still functioning in a civic
regard . "
enron mentions
usa : enron shares hit lowest level since july 1992 .
reuters english news service - 10 / 30 / 01
wolf haldenstein law firm announces class action suit on behalf of purchasers of only enron non - common - equity stock , including preferred and preferred - related stock , against enron corp .
business wire - 10 / 30 / 01
uk : uk power prices lower as mild weather hits demand
reuters english news service - 10 / 30 / 01
stocks close lower as investors react to economic data
dow jones business news - 10 / 30 / 01
enron shares fall a day after moody ' s lowers rating ( correct )
bloomberg - 10 / 30 / 01
epdc to spend $ 500 mln abroad as japan deregulates power market
bloomberg - 10 / 30 / 01
enron default insurance signals eroding confidence ( update 5 )
bloomberg - 10 / 30 / 01
u . s . equity movers : anthem , cvs , enron , hispanic broadcasting
bloomberg - 10 / 30 / 01
enron chairman weathers a storm : many in houston believe lay can get
firm back on track ( business )
the dallas morning news - 10 / 30 / 01
usa : enron shares hit lowest level since july 1992 .
10 / 30 / 2001
reuters english news service
( c ) reuters limited 2001 .
houston , oct 30 ( reuters ) - shares of enron corp . on tuesday dropped to their lowest level in more than nine years on tuesday , a day after the embattled energy giant said it was seeking fresh credit and a rating agency cut some of the company ' s debt to two notches above junk status .
enron ' s stock was down $ 2 . 86 , or 20 . 7 percent , at $ 10 . 95 in late trading on the new york stock exchange , extending the company ' s losing streak to a 10 th straight day . the last time the shares traded below $ 11 was in july 1992 .
after cutting enron ' s rating on monday , moody ' s investors service warned that it could lower the rating on the company ' s senior unsecured debt even further , as well as cut enron ' s short - term debt status .
houston - based enron has lost more than $ 15 billion in market capitalization in the past two weeks amid a series of disclosures about off - balance - sheet deals with partnerships run by its former chief financial officer who was replaced last week .
the wall street journal said in its tuesday edition that the u . s . securities and exchange commission ( sec ) had moved an inquiry about the deals from its regional office in fort worth , texas , to its washington d . c . headquarters , indicating that the probe is being treated as a high priority .
copyright ? 2000 dow jones & company , inc . all rights reserved .
wolf haldenstein law firm announces class action suit on behalf of purchasers of only enron non - common - equity stock , including preferred and preferred - related stock , against enron corp .
10 / 30 / 2001
business wire
( copyright ( c ) 2001 , business wire )
new york - - ( business wire ) - - oct . 30 , 2001 - - the following is an announcement from the law firm of wolf haldenstein adler freeman & herz llp :
wolf haldenstein adler freeman ( 2 ) enron was failure to write - down impaired assets on a timely basis in accordance with gaap ; and ( 3 ) the company ' s operating results were materially overstated as a result of the company ' s failing to timely write - down the value of its investments with certain limited partnerships , including those described above . on october 16 , 2001 , enron surprised the market by announcing that in the third quarter of 2001 , the company was taking non - recurring charges of $ 1 . 01 billion after tax ( $ 1 . 11 per diluted share ) . enron failed to clearly disclose until october 18 that it also was taking a $ 1 . 2 billion writedown in shareholders ' equity as a result of unwinding the investments with the limited partnerships controlled by mr . fastow . since the announcement of the $ 1 . 2 billion writedown in shareholders ' equity , the market price of enron preferred securities has dropped significantly .
this lawsuit is brought on behalf of only the preferred shareholders of enron , which include among others the following classes of stock :
1 . enron capital llc , 8 . 00 % , 11 / 30 / 43 series , 8 million shares
outstanding , traded on the new york stock exchange .
2 . enron capital trust i , 8 . 3 % series , 8 million shares
outstanding , traded on the new york stock exchange .
3 . enron capital trust ii , 8 . 1250 % series ( preferred r ) , 6
million shares outstanding , traded on the new york stock
exchange .
4 . enron capital trust iii , 200 , 000 shares outstanding .
5 . enron capital resources lp , 9 . 0 % , 8 / 31 / 24 series a , 3 million
shares outstanding , traded on the new york stock exchange .
6 . portland general electric , 7 . 75 % , 6 / 15 / 07 series , 300 , 000
shares outstanding , traded on the nasdaq .
7 . portland general electric , 8 . 25 % , 12 / 31 / 35 series a , 3 million
shares outstanding , traded on the new york stock exchange .
purchasers of convertible preferred stock are not included in the class .
plaintiff seeks to recover damages on behalf of all those who purchased or otherwise acquired enron preferred securities . if you purchased or otherwise acquired enron preferred securities during the class period , and either lost money on the transaction or still hold the securities , you may wish to join in the action to serve as lead plaintiff . if you purchased enron preferred securities during the class period , you may , no later than december 21 , 2001 , request that the court appoint you as lead plaintiff . a lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation . in order to be appointed lead plaintiff , the court must determine the class member ' s claim is typical of the claims of other class members , and that the class member will adequately represent the class . under certain circumstances , one or more class members may together serve as " lead plaintiffs . " your ability to share in any recovery is not , however , affected by the decision whether or not to serve as a lead plaintiff . you may retain wolf haldenstein , or other counsel of your choice , to serve as your counsel in this action . although you may contact and retain as your counsel one of the law firms which are representing common stock shareholders in related litigations , we recommend that anyone who owns preferred securities should contact attorneys who will only represent preferred shareholders .
wolf haldenstein has extensive experience in the prosecution of securities class actions and derivative litigation in state and federal trial and appellate courts across the country . the firm has approximately 60 attorneys in various practice areas ; and offices in chicago , new jersey , new york city , san diego , and west palm beach . the reputation and expertise of this firm in shareholder and other class litigation has been repeatedly recognized by the courts , which have appointed it to major positions in complex securities , multi - district and consolidated litigation .
if you interested in being included in our action or serving as one of the lead plaintiffs , please contact wolf haldenstein adler freeman & herz llp at 270 madison avenue , new york , new york 10016 , by telephone at ( 800 ) 575 - 0735 ( george peters , derek behnke , robert b . weintraub , esq . , jeffrey g . smith , esq . , daniel w . krasner , esq . ) , via e - mail at classmember @ whafh . com or visit our website at http : / / www . whafh . com . your e - mail should refer to enron preferred securities .
contact : wolf haldenstein adler freeman & herz llp , new york george peters , derek behnke , robert b . weintraub jeffrey g . smith , daniel w . krasner 800 / 575 - 0735
15 : 43 est october 30 , 2001
copyright ? 2000 dow jones & company , inc . all rights reserved .
uk : uk power prices lower as mild weather hits demand .
10 / 30 / 2001
reuters english news service
( c ) reuters limited 2001 .
london , oct 30 ( reuters ) - uk electricity prices dipped on tuesday , pressured by a sagging prompt market as mild weather dented demand .
liquidity fell as around 10 companies kept on hold their dealings with u . s . group enron as they reviewed their credit arrangements with the troubled company .
" there have been a few problems with liquidity , there aren ' t as many prices out there , but it ' s not serious , " said one trader .
enron , mainly via its enrononline internet platform is one of the uk market ' s biggest traders .
day ahead baseload last traded around 15 . 20 pounds a megawatt hour , down five pounds from the previous close . it was offered at 15 . 45 pounds at the close .
traders blamed lower - than - expected demand due to warm weather for prompt market weakness .
national grid said demand through to the middle of last week was about two percent down on the same period last year .
december baseload also fell sharply , assessed around 19 . 05 pounds , down 70 pence .
forward curve prices also dropped as a bearish tone took hold across the market .
summer 02 baseload was down about 10 pence at 17 . 32 pounds and winter 02 baseload shed 20 pence to 19 . 70 pounds .
copyright ? 2000 dow jones & company , inc . all rights reserved .
stocks close lower as investors react to economic data
by erin schulte
10 / 30 / 2001
dow jones business news
( copyright ( c ) 2001 , dow jones at one point , the average had been down more than 200 points . the nasdaq composite index dropped 32 . 11 , or 1 . 9 % , to 1667 . 41 after tumbling 69 . 44 on monday .
other indexes also lost ground . the s economists surveyed by thomson global markets had expected an october reading of 96 .
this month ' s report was previously cited by bond - market strategists as an indicator of particular importance to gauge the response of consumers in the weeks following the sept . 11 terrorist attacks on new york and washington , but also the level of confidence as the u . s . continues to face the threat of anthrax .
ian shepherdson , chief u . s . economist for high frequency economics , said the number was " in short , awful . " however , he added , much of the decline could be blamed on the present - situation number , which tumbled to 107 . 6 from 125 . 4 .
" if there is any saving grace in these numbers it is that the present - situation index , which tells us little about future spending , fell by much more than the expectations number , which does have real forward - looking value , " he said . the expectations number dropped to 70 . 8 from 78 . 1
the consumer - confidence report is one of several key indicators due out this week .
on wednesday , the bureau of economic analysis will report on third - quarter gross domestic product . on thursday , the national association of purchasing management will report on how the manufacturing sector fared in october , and the labor department ' s closely watched monthly unemployment data will be released friday .
selling in key international markets also pressured wall street . frankfurt ' s dax was down 2 . 5 % , while london ' s financial times - stock exchange 100 - share index was down 1 . 6 % . earlier , japan ' s nikkei 225 average closed with a loss of 0 . 94 % , and hong kong ' s hang seng index fell 1 % .
among stocks to watch , cvs was one of the big board ' s biggest losers , tumbling 23 % after the drugstore chain posted a 23 % decline in third - quarter net income and unveiled a restructuring plan that includes the shutdown of about 200 stores in the first quarter of next year .
also , merrill lynch cut the company ' s long - term rating to " accumulate " from " buy . "
" shrinkage , poor general merchandise sales and supermarket - type discounting are all robbing the company of a vital year - end gross - margin flourish , " said merrill lynch analyst mark husson . " while these problems are fixable , we believe there is not much for investors to get excited about in the intermediate - term . "
rite aid and walgreen ' s followed cvs ' s path lower , declining 9 . 5 % and 2 . 7 % respectively after merrill lynch cut their long - term ratings to " accumulate " from " buy . "
dow component eastman kodak was the biggest loser of the industrial average , sinking 6 . 9 % after lehman brothers said wal - mart stores was ready to unveil a private - label film offering , which could hurt sales for kodak ' s film .
mcdonald ' s also was a big loser among dow industrial components , giving up 4 . 7 % after the fast - food chain cut its earnings guidance for 2002 to an improvement of between 5 % to 10 % , well below traditional double - digit guidance . the company also said it will take a charge in the current quarter to cover restructuring .
and dow component philip morris lost 4 % after goldman sachs analyst marc cohen removed the tobacco giant from his " recommended for purchase " list and lowered the 2002 earnings estimate to $ 4 . 45 a share from $ 4 . 53 , which represents 10 % profit growth instead of previously expected growth of 12 % .
enron shares tumbled 19 % as credit concerns persisted about the houston energy - trading company . moody ' s investors service lowered its ratings by one notch on the company ' s senior unsecured debt and kept the company under review for a possible further downgrade . and the securities and exchange commission has moved its inquiry into enron ' s finances to the agency ' s washington headquarters from a regional office .
in major u . s . market action :
stocks fell . on the big board , where 1 . 30 billion shares traded , 2 , 159 stocks fell and 943 rose . on the nasdaq , 1 . 79 billion shares traded hands .
bonds gained . the 10 - year treasury note rose more than 1 / 2 point , or $ 5 for each $ 1 , 000 invested . the yield , which moves inversely to price , fell to 4 . 416 % . the 30 - year bond was up 3 / 4 point to yield 5 . 215 % .
the dollar was mixed . it traded at 121 . 94 yen , down from 122 . 97 late monday , while the euro fell against the dollar to 90 . 46 u . s . cents from 90 . 48 .
copyright ( c ) 2001 dow jones & company , inc .
all rights reserved .
copyright ? 2000 dow jones & company , inc . all rights reserved .
enron shares fall a day after moody ' s lowers rating ( correct )
2001 - 10 - 30 16 : 48 ( new york )
enron shares fall a day after moody ' s lowers rating ( correct )
( corrects today ' s low price in second paragraph . )
houston , oct . 30 ( bloomberg ) - - enron corp . shares fell 19
percent after touching the lowest level in more than nine years , a
day after moody ' s investors service placed the largest energy
trader ' s rating for commercial paper on review for downgrade and
lowered its long - term debt to two notches above junk status .
shares of enron dropped $ 2 . 65 to $ 11 . 16 . earlier , the stock
fell to $ 10 . 90 , the lowest since july 1992 . the stock , down for
the 10 th day in a row , has tumbled 87 percent this year .
moody ' s lowered enron ' s long - term credit rating to ` ` baa 2 ' '
from ` ` baal ' ' yesterday . it also placed the company ' s ` ` p - 2 ' '
rating for commercial paper on review for possible downgrade .
` ` i think investors would have loved to have no downgrade or
a more stable outlook for the company , ' ' commerzbank securities
analyst andre meade said . ` ` moody ' s left some uncertainty . ' '
meade doesn ' t own enron shares and rates the company
` ` accumulate . ' '
executives from exelon corp . , american electric power co . and
northeast utilities said they still are trading with enron .
` watching closely '
` ` nervous is probably not the right word , but we are watching
very closely , ' ' aep chief executive officer linn draper said at an
energy conference in new orleans . ` ` we are focusing our new deals
with them in the short term , november and december , ' '
columbus , ohio - based aep is the biggest u . s . electricity
generator . traders often buy and sell power for delivery the next
day or for over a week , month , quarter or calendar year . the
bloomberg energy service is quoting power prices for as far ahead
as september 2003 .
` ` we are keeping a close eye on our exposure , ' ' exelon corp .
co - chief executive officer john rowe said at the conference . ` ` we
are keeping a tight dollar limit on trades . ' ' he declined to
provide specifics .
chicago - based exelon is the biggest u . s . nuclear - power
producer .
` ` three weeks ago , we started monitoring our position with
enron , ' ' northeast chief financial officer john forsgren said at
the conference . ` ` right now , we have a net payable to them , so
there ' s no exposure on our side , and we ' ll probably keep it that
way . ' '
northeast , based in berlin , connecticut , will continue to
trade with enron as long as its debt ratings remain investment
grade , forsgren said . northeast is new england ' s biggest utility
owner .
sec inquiry
the wall street journal reported that a u . s . securities and
exchange commission inquiry into enron ' s financial dealings with
affiliates , run by the company ' s former chief financial officer
andrew fastow , has moved to washington , signaling the
investigation has become more serious .
investors say they are worried about $ 3 . 3 billion in
liabilities from the affiliates , which were formed to buy and sell
enron assets . houston - based enron ousted fastow on wednesday amid
the sec inquiry into the partnerships he ran that cost the company
at least $ 35 million .
other energy stocks also fell today as the price of natural
gas on the new york mercantile exchange dropped as much as 3 . 7
percent . the standard and
19 percent of a 700 megawatt plant run by thai oil power co . epdc
is also building in thailand its first biomass plant outside
japan , which uses agricultural waste as fuel .
favorite destination
` ` thailand is our favorite destination because we believe
political risk there is almost zero , ' ' said epdc ' s takaraya .
` ` still , it ' s a little bit dangerous to concentrate our
portfolio in one country . ' ' the next acquisition may be a stake in
a gas - fired power plant in the philippines , he said .
epdc ' s overseas campaign demonstrates japan ' s change in
policy . the company was set up in 1952 to build hydro and coal -
fired power stations to reduce dependence on oil - fired power and
help meet increasing demand from industrial growth . its 58
hydropower plants and eight thermal stations are able to generate
as much as 16 , 015 megawatts , or 6 . 4 percent of the country ' s
capacity .
epdc ' s sales for the year ended march rose 10 percent to $ 4 . 1
billion , while gross profit rose 7 percent to $ 292 million .
in june 1997 , japan ' s cabinet decided to privatize the
company within five years as part of the proposed deregulation .
the sale , now expected in 2003 , would help cut the company ' s debt ,
which totaled 2 . 1 trillion yen ( $ 17 billion ) , or 30 times its
capital , in march .
japan ' s power producers , able to sell bonds paying as little
as 0 . 5 percent , are some of asia ' s biggest borrowers . tepco owed
7 . 76 trillion yen in long term debt in march .
epdc says it ' s aware of the political risks in investing in
asia and chooses markets carefully .
` ` it ' s not the time to go to indonesia , ' ' takaraya said .
enron default insurance signals eroding confidence ( update 5 )
2001 - 10 - 30 16 : 32 ( new york )
enron default insurance signals eroding confidence ( update 5 )
( adds background in 10 th paragraph . )
new york , oct . 30 ( bloomberg ) - - the price that investors pay
to protect against a bond default by enron corp . doubled this
week , reflecting on erosion of confidence in the biggest energy
trader . the shares plunged for a 10 th day .
to hedge against losses for the next 18 months , investors now
have to pay as much as 16 . 5 percent of the face value of bonds
they own . a week ago , such insurance cost 7 . 5 percent , according
to creditsights inc .
enron ` ` made a lot of people nervous and the concern is the
nervousness will seep into enron ' s operating business , ' ' said
austin ramzy , director of fixed income research at principal
capital income investors in des moines , iowa , which owns about
$ 190 million in enron bonds . ` ` the question of the day is whether
the crisis of confidence can be stopped . ' '
the increase in the price of so - called default swaps is
another reflection , along with a 65 percent decline in enron
shares in the past two weeks , that investors are losing confidence
in the company , analysts said .
enron shares , down 19 percent today to $ 11 . 16 , have fallen
every day since the company surprised investors by writing off
$ 1 . 2 billion of assets on oct . 17 .
enron ' s 6 . 4 percent coupon bonds due in 2006 were bid at 73
cents on the dollar , traders said , down as much as 7 cents from
yesterday ' s price of 80 cents . the debt now yields 14 . 5 percent ,
up from 12 . 1 percent yesterday and 10 . 8 percent on friday .
exposure
` ` banks wanting to hedge risk are pushing the price higher , ' '
said andy palmer , who doesn ' t own enron bonds in the $ 1 . 25 billion
he helps manage at asb capital management inc .
enron default protection has risen from less than 3 percent
per year , a price that is common for similarly rated companies .
other energy traders ' such as williams cos . inc . and dynegy inc .
both have default insurance premiums below 2 percent per year ,
traders said .
the increase in enron ' s credit default swaps ` ` may be
overstating the default risk , ' ' said palmer . the purchasers of the
default swaps are mainly banks that have loan exposure to enron
and ` ` banks are not as price - sensitive as institutional
investors , ' ' said palmer . ` ` they just want to get the exposure off
their books . ' '
principal capital , which is an institutional investor , said
did not buy protection for its $ 190 million of enron bonds .
john tompkins , a trader at credittrade , a credit derivatives
brokerage , said there ' s interest among buyers , though not sellers
of enron default swaps . he said there are bids for enron credit
default swaps at 7 to 8 percent annually for five years '
protection and 12 percent annually on the three years ' contract - -
with no offers .
enron credit was one of the world ' s biggest non - bank traders
of default insurance .
undisclosed
the largest energy trader ' s troubles began two weeks ago when
it reported $ 1 . 01 billion in losses , including more than $ 544
million written off on a competitive energy supplier business and
a bandwidth trading business .
enron formed at least 18 affiliated companies to buy and sell
company assets , according to records from the texas secretary of
state . some of those affiliates profited after enron used $ 1 . 2
billion of company stock to buy back assets from the partnership .
the houston - based company losses included $ 35 million from
partnerships set up by chief financial officer andrew fastow .
fastow was later fired as chief financial officer and the u . s .
securities and exchange commission has asked for information about
the transactions .
the disclosure has set off concern among investors about how
little is known about enron ' s balance sheet and caused ratings
companies to examine the company .
` ` investors are nervous about this name , ' ' said freda lam , a
fixed - income analyst at j . p . morgan chase & co . in new york .
investor relations
enron ' s long - term debt rating was cut yesterday to ` ` baa 2 , ' '
two levels above junk , from ` ` baal . ' ' moody ' s also placed the
houston - based company ' s ` ` p - 2 ' ' rating for commercial paper - -
borrowing for nine - months or less - - on review for downgrade .
enron has been shut off from the commercial paper market since the
ratings agencies began the review .
the lack of access to money markets makes it more difficult
for enron to borrow the short - term cash needed to run its trading
businesses . ahead of a potential cut , enron took out bank lines to
repay $ 2 billion in commercial paper last week .
still , many on wall street expects enron ' s bonds to be paid
and its stock price to bounce back .
` ` we suspect that enron ' s share price will not likely recover
in the near term , ' ' lam said . ` ` we ultimately expect this company
to be successful . but it needs to improve its investor relations
and its disclosure . ' '
u . s . equity movers : anthem , cvs , enron , hispanic broadcasting
2001 - 10 - 30 13 : 24 ( new york )
u . s . equity movers : anthem , cvs , enron , hispanic broadcasting
new york , oct . 30 ( bloomberg ) - - the following is a list of
companies whose shares are moving in u . s . markets monday , oct . 29 .
the stock symbol is in parentheses after the company name .
major moving stocks :
anthem inc . ( ath ) rose $ 4 . 57 , or 13 percent , to $ 40 . 57 and
traded as high as $ 40 . 80 . the health - benefits company raised $ 1 . 78
billion in its initial public offering .
cvs corp . ( cvs ) fell $ 8 . 01 , or 25 percent , to $ 23 . 61 and
traded as low as $ 23 . the drugstore chain said profit this year
will unexpectedly decline and it will close 200 stores and cut
jobs early next year .
other moving stocks :
crossworlds software inc . ( cwld ) rose $ 1 . 02 , or 29 percent ,
to $ 4 . 56 and traded as high as $ 4 . 58 . international business
machines corp . ( ibm ) agreed to buy the maker of electronic -
commerce software for $ 129 million in cash .
csg systems international inc . ( csgs ) fell $ 6 . 94 , or 18
percent , to $ 32 . 26 and traded as low as $ 30 . 40 . the provider of
billing services for cable - and satellite - television companies
expects 2002 earnings of $ 2 to $ 2 . 15 a share , which is lower than
the $ 2 . 48 average estimate of analysts polled by thomson
financial / first call .
ctc communications group inc . ( cptl ) fell 90 cents , or 13
percent , to $ 6 and traded as low as $ 5 . 26 . the provider of
telecommunications services doesn ' t expect to have positive
earnings before interest , taxes , depreciation and amortization
until the fourth quarter ending in march . that is one quarter
later than its previous estimate .
dycom industries inc . ( dy ) fell $ 1 . 40 , or 11 percent , to
$ 10 . 99 and traded as low as $ 10 . 75 . the provider of engineering
and construction services to telecommunications companies said
profit , excluding certain costs , in the first quarter ended
saturday was 13 cents to 15 cents a share . on that basis , which
isn ' t in accordance with generally accepted accounting principles ,
profit was 5 cents to 7 cents below expectations , the company said
in a statement distributed by pr newswire .
enron corp . ( ene ) fell $ 2 . 51 , or 18 percent , to $ 11 . 30 and
traded as low as $ 11 . 07 . the securities and exchange commission
will move its investigation of the energy trader to washington
from fort worth , texas , a sign the agency wants to make a quick
decision above whether to allege securities - law violations , the
wall street journal reported .
ensco international inc . ( esv ) fell $ 2 . 25 , or 10 percent , to
$ 20 . 32 and traded as low as $ 20 . the offshore oil driller was
downgraded to ` ` hold ' ' from ` ` add ' ' by abn amro securities llc
analyst matthew conlan .
hispanic broadcasting co . ( hsp ) fell $ 2 . 76 , or 15 percent , to
$ 15 . 25 and traded as low as $ 15 . 05 . the spanish - language
broadcaster said third - quarter profit fell to 8 cents a share from
12 cents a year earlier because it sold less advertising .
homestore . com inc . ( homs ) fell 74 cents , or 13 percent , to
$ 5 . 15 and traded as low as $ 4 . 86 . the internet real - estate listing
service was downgraded to ` ` market outperform ' ' from ` ` recommend
list ' ' by goldman , sachs & co . analyst anthony noto .
macrovision corp . ( mvsn ) fell $ 8 . 75 , or 26 percent , to $ 24 . 72
and traded as low as $ 23 . 80 . the maker of copyright - protection
software expects fourth - quarter revenue to be unchanged from the
$ 23 million it had in the third quarter . it was expected to have
sales of $ 31 . 5 million , the average estimate of four analysts
surveyed by first call .
mcdonald ' s corp . ( mcd ) fell for a second day , dropping $ 1 . 61 ,
or 5 . 9 percent , to $ 25 . 67 . the stock traded as low as $ 25 . 55 . the
fast - food chain yesterday said it will open 200 fewer restaurants
and buy back as much as $ 5 billion in stock , as the company tries
to turn around four quarters of falling profit .
odwalla inc . ( odwa ) rose $ 3 . 29 , or 28 percent , to $ 15 . 12 and
traded as high as $ 15 . 21 . coca - cola co . ( ko ) agreed to buy the
natural fruit - drink maker for $ 181 million in cash . coca - cola will
pay $ 15 . 25 a share for odwalla ' s common stock .
openwave systems inc . ( opwv ) fell $ 1 . 91 , or 21 percent , to
$ 7 . 08 and traded as low as $ 6 . 69 . the maker of software for
accessing the internet over mobile phones said sales in the second
quarter ending in december will be about $ 100 million , which is
less than the $ 123 . 4 million average estimate of analysts polled
by first call .
rehabcare group inc . ( rhb ) fell $ 13 . 48 , or 35 percent , to
$ 25 . 22 and traded as low as $ 23 . the manager of hospital
rehabilitation services said it will have fourth - quarter earnings
of 41 cents to 42 cents a share . the company had been expected to
earn 46 cents , the average estimate of six analysts polled by
first call .
royal caribbean cruises ltd . ( rcl ) rose $ 1 . 66 , or 18 percent ,
to $ 10 . 81 and traded as high as $ 10 . 95 . the cruise - line company
had third - quarter net income of 82 cents a share , compared with
the 72 - cent average estimate of analysts polled by first call .
sulzer medica ag ( sm ) american depositary shares , 10 of which
represent one share , fell $ 1 . 49 , or 35 percent , to $ 2 . 80 and
traded as low as $ 2 . 30 . the maker of orthopedic products said a
court will allow individual lawsuits over faulty hip and knee
implants , casting doubt on a plan for a group settlement .
enron chairman weathers a storm : many in houston believe lay can get
firm back on track ( business )
bruce nichols
10 / 28 / 2001
the dallas morning news lh
copyright 2001 gale group inc . all rights reserved . copyright 2001 the
dallas morning news , l . p .
houston - over the last 15 years , enron corp . has transformed itself
from a sleepy gas pipeline company into an energy trading giant .
chairman ken lay has changed along with it , from mere titan of
business to houston ' s leading citizen .
so when business reversals hit enron and mr . lay , the ripples are felt
throughout civic life in a city where he has held virtually every
leadership position and the corporate name graces the baseball stadium .
two months after his heir apparent resigned , mr . lay has seen his
company buffeted by investors and has had to oust his chief financial
officer .
the securities and exchange commission is looking into deals in which
the former cfo played dual roles with enron and a hedge group .
" my sense is it ' s probably a little too soon to tell what the impact
is with ken himself , " said bob eury , president of central houston inc . ,
a downtown development group .
a loss of his and enron ' s leadership " would be profound , " mr . eury
added , but most houstonians expect mr . lay to weather the company ' s
difficulties and continue his " marvelous leadership out in the
community . "
still , no one is going to be surprised if mr . lay is preoccupied for a
while .
" if the ship ' s on fire , you address that first , " said oilman george
strake , who has worked with mr . lay on civic projects .
mr . lay , 58 , returned to the chief executive ' s role in august when his
protege , jeffrey k . skilling , quit as ceo and president after only six
months on the job . and mr . lay cited those burdens last week when he
resigned as a director for i 2 technologies , the software developer based
in farmers branch .
" this is a very painful decision , " mr . lay said in a prepared
statement . " but now that i am again taking on the ceo responsibilities
at enron , i must reduce my outside activities . "
enron ' s fall has been hard .
from a 52 - week peak of $ 84 . 62 on dec . 28 , the stock has been tumbling
for months . it skidded all the way to $ 15 . 40 as of friday ' s close , about
half its value just two weeks earlier .
profits remain strong , but the company has announced write - downs of
key assets - totaling $ 1 . 01 billion in after - tax nonrecurring expenses -
and wall street analysts have turned coldly skeptical , if not hostile .
mounting troubles
enron confirmed the securities and exchange commission inquiry into
deals involving the just - departed cfo , andrew fastow . under pressure ,
enron replaced him wednesday .
there have been other troubles , too . as lead advocate for electricity
market restructuring , enron found itself under furious attack during
california ' s energy crisis last spring . investments in communications
and water businesses soured . a huge power plant project in india has
become a problem .
mr . lay has said all the concern is misplaced .
" to say the least , we are . . . disappointed with our stock price , " he
told investors last week . but " our businesses are performing very well ,
and we ' re continuing to conduct business as usual . "
as for the sec ' s interest , " we welcome . . . the opportunity it provides
us to put these matters to rest , " he said .
skepticism that mr . lay can pull enron back into the middle of the
road exists in houston .
but the doubters don ' t want to be quoted by name and are not
necessarily betting against him , considering his past successes .
in houston , " nobody ' s dancing on his grave , " said lawyer david berg ,
who ' s active in civic and political affairs . " there ' s a lot of residual
respect for ken lay , and it ' s not going to go away even if he goes
bankrupt , but that isn ' t going to happen . "
wall street reaction
financier charles miller , a wall street veteran , said analysts appear
to be ganging up on enron , with a few making " indefensible " comments
that might be criminal if made about a bank .
" wall street may be envious of the fact that , from the trading
standpoint , he may have made one of the most profitable trading
operations in the history of the world and , from all i can tell , very
soundly , " mr . miller said .
from wall street comes a different interpretation : after the exit of
two top executives in two months , the company ' s other problems , and the
sec ' s inquiry , it ' s time for more information from the company .
" they ' ve breached the confidence level with one thing after another , "
said john parry , analyst with john s . herold inc .
the 1980 s oil , banking , and real estate busts have colored houston ' s
attitude toward business reversals , some say .
having seen fortunes rise , fall , and rise again in the ' 90 s , houston
is less likely to lose leaders to temporary setbacks , energy banker
matthew simmons said .
" most cities , if you ' re new or if you ' re struggling , you ' re shut out , "
mr . simmons said . not houston , and " i think that ' s its genius . "
real estate investor ned holmes recalled that when exxon corp .
suffered through the 1989 alaska oil spill , the chamber of commerce
threw a reception to express support and appreciation for the company ' s
civic contributions .
" we all turned out and told them that . . . we know this is a difficult
deal , but they ' re an important part of this community and we ' re not
turning our back on them , " mr . holmes said . " people feel every bit as
strongly , if not more so , about ken . "
it ' s hard to overstate the importance of mr . lay and enron in houston .
he chaired or co - chaired committees leading houston in playing host to
the g - 7 summit in 1990 and the republican national convention in 1992 .
he chaired the university of houston board of regents .
when plans for a new baseball stadium hit a snag in the mid - 1990 s , he
assembled a group of investors to buy the land and facilitate a deal
that led to voter approval . enron then bought the naming rights to the
astros ' new home , enron field .
mr . lay helped lead efforts to win voter approval of a new basketball
arena , now under construction . he has backed rail transit and other
measures to clean houston ' s air .
he and his wife , linda , have been active in charities and have
supported political candidates .
new model
in reinventing itself into a $ 100 billion - a - year energy trader , enron
created a business model that other energy companies have followed ,
making houston a leader in a new kind of commodities market .
enron , whose influence extends into the white house of president bush ,
is in the midst of adding to houston ' s skyline , building a 40 - story
building next door to the 50 - story building it already occupies .
losing mr . lay ' s and enron ' s leadership " would be a sizable blow , "
said jim kollaer , president of the greater houston partnership , a
business - boosting group that includes the chamber of commerce . but " he
hasn ' t pulled back . "
" he has to be there to answer these questions . he ' s going to take time
to do that , " mr . kollaer said . " but he ' s still functioning in a civic
regard . "