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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: ItsAllCyclical who wrote (19933)	3/8/2003 8:26:42 AM
From: jim_p	Read Replies (3) \| Respond to of 206121

I'm glad they are getting out of the trading business and still like the stock. 1. It lowers the future risk of negative surprises for both the banks, the credit rating agencies and the shareholders. 2. It frees up $700MM ?? in cash collateral that can now be applied to the debt as the portfolio liquidates. 3. It will lowers G&A costs by getting rid of one more department and simplifies the business resulting in a higher confidence of future earnings which will ultimately result in a higher PE for the stock. 4. It will result in the company obtaining credit upgrades faster due to the lower risk going forward. The truth is no company should be in this business unless they have an investment grade credit rating and can use their balance sheet instead of precious cash to conduct operations. The problem I have is the press release itself. The way this release is written it tells the world that the reason were getting out is because we're a bunch of incompetent bumbling idiots who don't know our ass for a hole in the ground and we lost our ass one more time at a critical time in the companies history. The timing of this really sucks!!! The release could just of easily had a positive spin. "RRI has decided to exit the trading business. The closing down of the operations and the liquidation of it's current positions is expected to result in a loss of $80MM in the first quarter." (there was no need to tell the world any more than this, and the stock would have gone up Monday) Management expects to reduce G & A expenses going forward by $XX, and the liquidation of the portfolio will result in the release of $700MM ?? in cash collateral that can be applied to debt and further reduce our interest expense by $XX going forward. Now a quote from the CEO telling us how brilliant he is for making this decision. I hate to say it, but this press release makes me lose a lot of confidence in the ability of management to run a public company. I now have to side with those who feel it's best to throw out management and start over. I plan to buy Monday if we sell off any. Jim