Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: Jdaasoc who wrote (50418)	4/11/2002 6:48:11 PM
From: Justa Werkenstiff	Respond to of 99280

JD: RE: "I doubt at 9:15 AM fair value will be positive." I hope and pray that is what most people think <g>.

To: Jdaasoc who wrote (50418)	4/11/2002 8:26:47 PM
From: mishedlo	Respond to of 99280

SAN FRANCISCO (CBS.MW) - Think the flap over the Bush administration and Enron is winding down? Think again. The release by the administration of thousands of pages of documents related to its energy task force last year has only heightened speculation that the Bush team is hiding something by refusing to provide logs of Vice President Dick Cheney's meetings with energy executives. While 11,000 pages of documents were released on court orders this week, most were heavily edited to blank out any useful information, particularly e-mails. The government continues to hold back an additional 15,000 documents, citing privacy and security concerns, as well as the mysterious Cheney logs. Cobbling from what little information was made available, reporters were able to quickly establish that Secretary of the Energy Spencer Abraham met almost exclusively with energy executives while helping formulate taskforce policy last year, while ignoring any submissions from environmental or consumer groups. Now, the idea that a Republican administration would be pro-business at the expense of the little guy is hardly a secret. In fact, I think it's written in the party's charter. The practice, however, goes to the heart of what I said back in January when the whole Enron (ENRNQ: news, chart, profile) mess broke in Washington. That the fallout will include a series of disclosures that will reveal in stark detail just how the current administration prefers to do business, which is exclusively with its industry buddies and a sneering disregard for the public at large. So far, so true. But the question remains. What could they possibly be hiding? Industry executives are baffled. Those who met with Cheney said they didn't recommend anything different than they've publicly requested for years. See full story. Consumer groups and environmentalists don't have a clue either. For an administration that has taken such a tough stand against Arthur Andersen in the Enron case, indicting the company and threatening the livelihood of 85,000 staff worldwide over documents shredded by a few dozen, the fact that it is trying itself to shield documents from the public is glaringly ironic. It's part of a pattern of holding back information that not only taints the administration with Enron, but leads to skepticism about any of its other motives, such as its messing with the Clean Air Act or its developing a shadow government in case of attacks on Washington. Now, three months after the whole thing erupted, we're still getting new bombshells on a weekly basis. The most recent one is that Secretary of the Army Thomas White, a former senior Enron executive, not only kept options on shares worth several millions of dollars when he left Enron last May - possibly violating terms of an ethics agreement - but that he was in touch with Enron on a frequent basis as it began to collapse in October. White made 13 calls to the company in October and sold about $3 million in stock during the month. That's pretty involved, especially at a time when he was supposedly coordinating the invasion of Afghanistan. White on Wednesday offered to resign if the flap over his Enron ties hampers his ability to do his job. So far at least, he retains the support of Bush and Defense Secretary Donald Rumsfeld. But the fact he would even feel the need to make the offer at a time when his job is so important to the country shows just how hard the administration has been hit by this scandal. From the very beginning, the Enron story has been much more than a business story about a failed company. It has been a story of greed and corruption on such a scale that both Washington and Wall Street have had to make changes to the way they operate that would have been unthinkable a year ago. Who would have guessed before Enron that Bush would agree to campaign finance reform? Who would have guessed that the accounting industry would finally succumb to pressure to abandon its inherent conflicts of interest in auditing and consulting, or that Wall Street would abandon pro forma earnings? And we haven't even gotten to the highlight of the show yet, the indictment of the Enron executives themselves, their trials, their testimonies, and their bombshells. No, this story has legs. And as long as any of the players in this drama refuse to come clean - including at the White House -- it will continue to astound us with fresh revelations, one at a time. David Callaway is executive editor of CBS.MarketWatch.com.

To: Jdaasoc who wrote (50418)	4/11/2002 8:45:15 PM
From: mishedlo	Respond to of 99280

From Wombat on the FOOL On 13 April 1998, almost four years ago to the day, I purchased 250 shares of EMC Corp (EMC) at an unadjusted price of 36 5/8 (this was when I actively started taking an interest in common stocks, and I still have the trade confirm). After two splits, that works out to a cost basis of roughly 9 1/8. Today that stock, the best performing NYSE stock of the 90's, I believe, closed trading at 9.74. Four years. La plus ca change........ wombat

To: Jdaasoc who wrote (50418)	4/11/2002 8:48:33 PM
From: mishedlo	Read Replies (1) \| Respond to of 99280

From Chris on the FOOL I'm cross-posting this from the AOL board (http://fireboards.fool.com/Message.asp?mid=17048184). Press Release from January 10, 2000: AOL and Time Warner announced “a strategic merger of equals to create the world's first fully integrated media and communications company for the Internet Century in an all-stock combination valued at $350 billion.” Today, that combined company is worth $85 billion. Holy Smokes! How does a merger between two companies end up with a loss of $265 billion in shareholder value in just 27 months? Is the sum of the parts really less than the whole? The whole idea was that this was going to become a monstrously powerful internet/media swiss-army-knife of a company. And as far as I can tell, it is monstrously powerful, isn't it? Was this just a big mistake? And if so, AOL's or TWX's? I've heard both sides of the argument, and I have to lean towards AOL because they had growing earnings and TWX had growing debt. But even with the debt, you have to think that all of the media properties have enormous value: CNN, HBO, Time, etc. At least the Cable business had to be worth something, right? Wasn't that one of the main selling points? AOL was going to have access to Time-Warner's Cable system and thus high-speed internet access? Can we really attribute this to a fall in advertising revenue? I don't think so. Was the future value of the advertising really worth $265 billion? Or is this all part of the deflation the internet equity bubble? I suspect this has a lot to do with it. In 2000, AOL had a Free-Cash-Flow of $1.3 billion or $0.53 per share according to this document: aoltimewarner.com That gives us a P/E ratio of 139 for the opening price of $74 on January 10, 2000 (the day of the big announcement) and the earnings for CY 2000. Remember how reasonable that sounded at the time? How much further will it go before it hits bottom? I have no idea. My crystal ball broke right before I bought Global Crossing at $49 per share. Thanks for the tip, George Gilder. This is probably one of the most polarized places to ask all these questions, but that won't stop me. It seems that I can find many people on this board who will tell me that it's because “AOL sucks” or that “Time Warner Sucks”. Generally, I don't find sucking to be an adequate explanation; and besides, the SEC doesn't recognize sucking as an allowable accounting standard (does it?). Likewise, I can find just about as many people here that will tell me that AOL really should be valued much higher than it is now, but that the markets just aren't realizing its full value. That explanation leaves me just as unsatisfied. Is the market just not seeing the $265 billion that is hidden under the AOL mattress? I don't think so. I'm not trying to flame the board. Really, I'm trying to figure out why something like this happens and how to recognize it in the future before it happens again. So I will gladly listen to any and all reasonable explanations of why $265 billion dollars in shareholder value disappeared. Thank you very much for your time. Chris McAdams (no position in AOL currently or in the past)