RealMoney.com's MIDDAY UPDATE
July 11, 2000
Market Data as of 7/11/00, 11:58 AM ET:
o Dow Jones Industrial Average: 10,769.27 up 122.69, 1.15%
o Nasdaq Composite Index: 4,009.32 up 29.03, 0.73%
o S&P 500: 1,484.73 up 9.11, 0.62%
o TSC Internet: 767.06 down 16.96, -2.16%
o Russell 2000: 532.65 up 1.82, 0.34%
In Today's Bulletin:
o Herb on TheStreet: Herb's Hotline: Will these Conseco Capers Never Cease?
Wrong! Rear Echelon Revelations: Live From New York, It's Jim Cramer
The trader is going to offer tips on spotting bottoms and will share his trading blotter.
Readers Are Mostly Upbeat, but Don't Expect the Running of the Bulls
There's no shortage of crystal-ball gazing among our readers.
Consumer Products: Second Quarter Looking Like a Washout for Household-Goods Makers
Consumer-products stocks continue to be stung by stagnant sales growth.
Dear Dagen: Proper Credit, Part IV: Readers Relate Horror Stories
Readers sound off on fixing reports, and credit-reporting agencies' accountability.
The Chartist: Trading Range Effects Ripple Through the Big Picture
The long-term view shows the positive base-building effects of this market phenomenon.
Analyst Actions: Analyst Actions: SDL, Career Education, Internet Gold, Intuitive Surgical
Herb on TheStreet: Herb's Hotline: Will these Conseco Capers Never Cease?
7/11/00 12:04 PM ET
Hotline heroics: How about that Gary Wendt? By now
knows that instead of getting a salary he gets a $45 million signing bonus. (For more details see Peter Eavis'
.) But did you know ... he also gets a $1.5 million annuity from a
sub (which, one of my short-selling sources cracks, may be the only new biz that sub writes for the quarter!) and did you know ... that if Wendt dies before June 30, 2005, his
wife will get $1 million a year through 2006. (She's not to be confused with his
wife who has tried to get a big piece of Wendt's assets in a well-publicized divorce battle. ... ) And did you know that in return, Wendt gets protection against the dilution of his interest in Conseco if the company raises new cash through a recapitalization or a reorganization? (
gets a similar deal in return for letting Wendt, who formerly ran
, out of his GE contract.) That's extremely important, says one Conseco short-seller, because Conseco needs
of money to shore up its insurance reserves and recapitalize its
sub. "Wendt and GE have covered themselves in this event by including the recap and reorg language in the option agreement," the short-seller gripes. "In short, I don't think this is really all that positive for common shareholders. He gets $45 million upfront (net of taxes) a lot of other perks and options, which are not affected when they pull in a lot of new capital or restructure the bonds (at, like, 50 cents) and give a bunch of the common to the bond holders." ...
Note to Conseco shareholders: Don't say you weren't warned! (And to think some people thought ex-CEO Stephen Hilbert was overpaid!) And note to Jamie Dimon: Next time, cut yourself a better deal. How is it that Wendt got so much and you got so little? (To take over
he was given a puny 35,000 shares and bought 2 million shares with his own money at 28; it's now 30. Who has the bigger incentive? Go, Jamie!)
Kaboom and Kabam:
. The recent columns
here questioning the company's too-cozy-for-comfort relationship with
didn't even get into whether NASCAR would issue disappointing earnings. But it did today and its stock went: Kabam, falling around 19% in the early going! ... And remember
? Remember the column
here back in May headlined, "Did Pinnacle Buy a Company Without Knowing What it Bought?" Was that a warning sign of some kind of looming trouble -- or what?!!! (I'd say what!) The upshot: Pinnacle this ay-em disappointed and its stock went kaboom -- down around 60%.
Potter patter: Hail to
, which delivered the
Harry Potter on time. (I say "right" because the company advertised the wrong number of pages for the Potter book on its Web site
, that is, this column (thanks to the column writer's eagle-eyed 11-year old) pointed out the error of its ways. ... Speaking of Amazon: Jim Dines who writes
The Dines Letter
wants fair and equal treatment for Amazon, which he believes will have the last laugh. "Jeff Bezos has been widely underestimated since day one," he says. "But he has surmounted incredible odds every time. We have decided to bet on him, and believe he will prevail yet again." Dines is as entitled as
, an Amazon short, whose last piece
here prompted Dines to call. ... Finally,
Frederick's of Hollywood
files for Chapter 11 bankruptcy a month after it was sold by
. Who is Knightsbridge? David Lipson. Who is David Lipson? Former CEO of
... the guy who was tossed out of his job there after leaving shareholders of
company with a horrible haircut ... the guy who is now appealing a court ruling that he illegally traded Supercuts' stock. Such is life ... and such is another edition of ... The Hotline. (And this note: Over the next few weeks I'll be preparing for a cross-country move. As a result, this column may not appear as frequently as it usually does.)
Herb Greenberg writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, though he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He welcomes your feedback at
email@example.com. Greenberg also writes a monthly column for Fortune.
Mark Martinez assisted with the reporting of this column.
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