Falling DownDominating Wednesday's debate, Cooperman pressed Tenet to either offer some concrete earnings guidance, signaling that execs have a reasonable basis for valuing the stock, or quit throwing money into the market. The manager, whose fund is long Tenet stock, went on to criticize execs for doling out and then quickly abandoning an earnings forecast last December. Back then, Tenet projected it could earn $2 a share by next year. Since then the company has offered only vague "preliminary" earnings guidance of $1.35 to $1.60 a share for 2003 and none at all for 2004. Cooperman indicated Wednesday that Tenet has no business spending money on company stock if it has no idea what to expect in return. Instead, he suggested that Tenet consider spending the money on dividends -- so investors can shop around for better investments on their own. Tenet doesn't currently pay a regular dividend.
AgreementOthers have fretted over Tenet's spending habits as well. For example, some critics believe that Tenet should relocate its corporate headquarters away from the expensive resort town of Santa Barbara, Calif. They point out that very few public companies operate in the pricey coastal city, and that one of the biggest -- Fidelity National Financial ( FNF) -- just announced plans to leave the area because it could save so much money. Fidelity's CEO explained to the Orange County Register last month that the cost of doing business there had, quite simply, become "oppressive." Tenet has given no indication that it would consider a similar move, despite suggestions that the company's top executives should abandon their sunny surroundings and move closer to the primary administrative center in Dallas. Instead, the company has pledged to find ways to save $100 million -- and eventually more -- by cutting back elsewhere. But Skolnick, for one, believes Tenet should be preserving all the cash it can right now. During Wednesday's call, she clearly hinted that Tenet's stock buybacks should stop. "Your balance sheet appears to be getting tighter and tighter," Skolnick said. "Is it really prudent for you to be going out and buying back stock?"