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Strategies & Market Trends : Mr. Pink's Picks: selected event-driven value investments -- Ignore unavailable to you. Want to Upgrade?

To: James Calladine who wrote (16132)	11/23/2001 1:21:31 AM
From: rupers	Respond to of 18998

Jim, re: ENE It's a crapshoot for either a short or long, and you can easily get burned doing either. If you like to day trade and scalp profits, given its daily volatility, then you'd enjoy the "thrill" of playing with ENE (I have). Pros/cons as a long: If Moody's doesn't downgrade (Fitch & S&P maintained their ratings at one notch above junk, even though ENE's bonds are trading as if junk status), and if DYN recommits to press with the M&A on the current terms, then it'll pop back to 8 or 9, imo. Lots of banks going all out to make the M&A happen. They've extended a lot of credit and altered terms to ENE to help with liquidity. If DYN backs out or changes terms of M&A (say, to .15 shares of DYN for each ENE share, which is now the rumor), it drops like a rock. If DYN backs out (which DYN is facing a lot of pressure to do), then ENE goes Chapt 11, unless another white knight comes to ENE's rescue (Blackstone has now said it wouldn't, but what about E.On? Who knows?) Always chance that S&P, Fitch, or Moody's will downgrade ENE credit to junk, and that accelerates ENE's liquidity crunch. 6-9 months earliest for DYN/ENE M&A to happen, and still have to convince FERC and DoJ to give the green light. ENE trying to sell more of its assets, but some of its assets (e.g., Dabhol stake and Wessex holdings)are not as valuable as ENE contends. There's good reason for the current 50% discount in the M&A premium. If you guess right on which way ENE will end up, you can make a lot. You guess wrong, and you'll be holding the bag. Good luck if you elect to play ENE.