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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: steve susko who wrote (86837)	3/28/2001 1:47:40 PM
From: pater tenebrarum	Read Replies (1) \| Respond to of 436258

don't talk like that about gold! -g- it's a friend of mine. from prudentbear: <<Speaking of construction, J.P. Morgan has indicated that not only is there no Chinese Wall between research and investment banking, but they have built a heavily trafficked boulevard connecting the two. According to The Times of London, JP Morgan’s head of equity research, Peter Houghton, sent a memo to his analysts explaining that before they change the rating on a stock they must get comments from the company in question, and from a JP Morgan investment banker. The Times quotes Mr. Houghton’s memo as saying, "If the company requests changes to the research note, the analyst has a responsibility to incorporate the changes requested or communicate clearly why the changes cannot be made." I suspect the correspondence from the investment banker might go something like this: Dear JP Morgan analyst: This communication is in response to your memo titled, "Bonko Corp. downgraded to Probably Should Buy from Almost Definitely Buy." After carefully reviewing your memo I must respectfully disagree with your conclusions. For example, where you note that Bonko’s accounts receivable are "largely un-collectable" I would point out that we are about to close a $1.5 billion commercial paper deal. In addition, where you note that the company’s long term debt burden is such that there is "not a chance in hell the bond holders will be repaid," I would remind you that another huge subordinated debt issue could be just around the corner. While my response remained muted when you originally downgraded Bonko from Definitely Buy to Almost Definitely Buy, this additional downgrade seems a bit over the top. Did I mention there is talk of spinning off the fiber business? …while the company might respond in this manner: Dear JP Morgan analyst: We at Bonko were shocked and dismayed to learn of your intention to downgrade our company’s stock based on your assessment that the recent re-pricing of management’s stock options would "significantly dilute earnings should there ever be any." This is especially disturbing since we have always been up front about our interest in "cashing out." As you know, the recent market environment has forced us to re-think this strategy of "secondary offering after secondary offering" and to focus more clearly on profits. We can assure you we are focused keenly on that objective, and in fact, the very word "profits" came up at a recent management retreat in Palm Springs. I’m afraid we must ask you to reconsider your downgrade. We also take exception to your projection of "nary a drop of free cash flow as far as the eye can see." For example, were you aware of the pending commercial paper deal?>> HO HO HO!!! prudentbear.com