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

To: Kevin Podsiadlik who wrote (17189)	10/11/2002 5:53:15 PM
From: ItsAllCyclical	Respond to of 18998

Kevin, you're right in that stocks can trade below innate asset value. Sometimes in the case of fraud. Other times due to a flawed business model. However, in the case of EP we are not talking about some sort of smoking gun. EP's power trading side has already been cleared of any wrongdoing by the FERC in CA. The pipeline side was found guilty simply because they didn't pump at the maximum allowable pipe-line pressure. Give me a break. If you study the CA situation carefully when it happened you'd discover that CA brought most of it upon itself. CA at numerous times blocked power companies and energy companies from setting up shop in CA. Not in my backyard they said. Also CA never fully deregulated. Of course Gov. Davis is going to go after every util to make himself look better for re-election. However, not every company in the energy sector is Enron. Based upon how other power generators are trading I don't think the value of EP's IPP side is less than 0, but we'll see. CPN which does far more business in CA than EP already settled with CA for a couple hundred mil I believe. And CPN is a pure-play IPP. CPN is struggling under a heavy debt load, but it's still well above 0. I think the FERC ruling against EP has been way overblown. Any settlement will blow the shorts out of the water. I've shorted stocks in the past and was very happy when the overall market bubble burst. So I don't mind shorts. Happy to hear that you have no position in EP. Wouldn't want you losing money. :)