Pres. Bush’s Astonishing Remarks
I am amazed and astounded that a sitting President would single out a U.S. based corporation and make remarks such as these: “Investment in Enron is Worthless”, “Enron went Bust” and “Enron is Broke”.
First, I think the President is factually incorrect when he made the foregoing comments. The public furor aside, fact is - what Enron may or may not be worth, at the moment, is being decided by Capital Markets and the Courts. Current prices on the “Pink Sheets” places a Market Capitalization value of Enron @ approximately $350. To $450. Million. As of Sept 30th, 2001 the most recent comprehensive financial data provided to the Securities Exchange Commission (SEC), by Enron, placed stock-holders equity (SE) @ $9.58 billion and Book Value (BV) per share @ $11.40. Obviously events since 3Q/2001 has eroded both SE & BV values.
Comment: The Presidents’ sound bites are rebroadcast infinitum around the globe. Such remarks not only have profound immediate impact on the current price of Enron (NSNRQ) common stock; it also has enormous implications with regard to ongoing negotiations to sell assets which would allow Enron to emerge from Chapter 11 with some residual value for common share holders. The price received for assets currently on the selling block may be severely impacted by the President’s remarks, thus making his pronouncements a self-fulfilling prophecy.
The fact that this has happened not just once; but, twice in recent days is even more astounding and raises the question in my mind, that the President is either being ill-advised or is answering questions extemporaneously without thoughtful evaluation of his statements. Certainly, a former governor of our second most populous State and now the President of the United States cannot be this naive.
FACTS: When Enron (ENE) was suspended from trading on the NYSE the last quoted price was $0.67.
When the symbol of Enron was changed to ENRNQ on the Over-The-Counter (OTC) Pink sheets, the stock opened at $0.50 abruptly dived to $0.22 before price recovery began. Millions of Enron shares trade daily on the “Pink Sheets”. Each time the President has made his extemporaneous remarks, positive momentum has been reversed.
(IMO) The President’s remarks may have placed in peril the successful recovery of Enron as a viable business and significantly reduced stock-holder value. His remarks have severely compromised prerogatives of the Bankruptcy Court in determining the ultimate distribution of assets between creditors and stock holders because of the possible erosion in value of assets (resulting from of his comments) currently being sold.
I have supported the President having voted for him as governor and as President. Despite my own personal misgivings which I regard as a temporary ‘faux-pas’ , I would still vote for him when I consider the previous alternatives. I am very disappointed with President Bush because of what I believe to be reckless and irresponsible public announcements with regard to Enron. If I were his advisor, I would suggest he be more careful before making such bold announcements aforethought.
Possibly worse than the debacle (heavily influenced by mass-media lead panic and hysteria) that has occurred would be a viable and sustained recovery of Enron over the next few years with a significant increase in Enron stock prices not unlike that of Chrysler, Texaco and other great companies who suffered, in hindsight, temporary set backs. Not only will they have suffered significant loss of savings & investments ; but, the possible opportunity (to buy more shares) provided by temporary events. Simply stated: Employees & Investors who may have sold in the past few weeks @ pennies on the dollar, may watch helplessly while Enron strives to attain its previous value.
The Enron catastrophe is truly a calamitous and sad event for thousands of employees and investors. That the President of United States may have unwittingly made a bad situation even worse is both unfortunate & saddening.
Good Luck
SargeK
P.S. Note to previous poster. In my worse case scenario I put residual value after BK & expenses @ 3 - 4 times what I paid for it. ($0.42 per share, my average per share costs)
Good Luck
SargeK |
