- Constellation Energy (NYSE: CEG - News) today announced that the sponsoring banks have confirmed that the firm, underwritten commitment for an additional $2 billion credit facility announced on Aug. 27, 2008, remains in effect. (the rumor was spread that this $2 billion would be pulled)
- Constellation Energy also confirmed that it has retained Morgan Stanley and UBS to act in an advisory capacity to evaluate strategic alternatives. The company and its advisors are in active discussions with potential strategic partners. (which means worst case scenario you are forcing us to sell ourselves even there is no reason for us to do so, other than rumors and hedgies buying the credit swaps in bulk to create an assumption "something is very wrong" - while spreading rumors to back it up)
- Constellation Energy also reinforced that its credit exposure to financial institutions is limited. As of Sept. 15, 2008, Constellation Energy had net credit exposure to 14 financial institutions. The company's estimated aggregate credit exposure, net of collateral, to these financial institutions was approximately $120 million, with no single financial institution representing more than $28 million of net credit risk exposure.
- Constellation Energy reaffirmed its third quarter 2008 outlook of $0.83 to $0.99 per share and full-year 2008 earnings guidance of $5.25 to $5.75 per share.
So on the positive side it is good management is proactive and addressing the "rumors" making the rounds. On the other side, the damage has been done to the stock, a lot of rumor mongers made a lot of money, and the fact this is an acceptable environment is an indictment of the current US financial system. It's a casino and circus into one. The regulators remain asleep.
Long Constellation Energy in fund and personal account
11 comments:
Thanks for the heads up on this one. Are you still looking for 40 to 50?
great call to buy CEG...what do you think of buying GE at these levels (23.30 last)? This stock is at 5 yr lows - concern with downside risk of financial services biz and LEH owns 21mm shares (or used to own)...How much downside riosk does GE Capital pose for the stock??
Nothing has changed from where it was last week in the 50s other than rumor mongering.
wofat, I don't really deal in those mega caps. I think UTX or Honeywell or something like that is safer as they don't have the financial arm. GE is 40% finance. I don't follow them closely enough as companies of $150B, $250B, $350B size really don't offer great upsides and/or most information is readily known.
I was watching Bloomberg last night, one of the analyst stated that if you apply the same multiple of other financial firms to GE's finance company then GE stock is overprice.
Will the new SEC (naked) short selling regulations and fines to be introduced tomorrow help reduce such manipulative short selling and rumormongering ?
Interested in hearing your opinion.
Won't do a thing to rumor mongering
We'll see on naked short selling side. They have HAD rules in PLACE for years. They do NOT enforce them. That's the issue. Not the rules. The lack of enforcing rules already there. The SEC is like the substitute teacher in 5th grade. No respect for the rules.
wow
they took it from 38 to 27
unbelievable market
shorts in total control
shoot at will
I have looked into this company more closely. Seems they have a big commodity trading arm. Financing is key to them. 83 per cent of revenue is non utility. Looks tempting but hard to figure out.
new of the short selling rule sure hasn't helped. Shorts don't have any fears of covering. The temp rules back in July seemed to help back then. Guess we'll see. Maybe there just making one last run so they can cover.
S&P has put CEG on creditwatch. Looks like bears are right. Sorry Mark
This is highway robbery
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