1. Users Were Also 17% More Likely to File Tax Returns by March 15Shares in Sanofi-Synthelabo ( SNY) enjoyed a nice little jump this week after the company said its new drug, rimonabant, could cure hair loss. OK. OK. We made that part up. The French pharmaceutical company didn't make that particular claim for rimonabant. But, given all the other claims made for this wonder drug in the making, it's probably just a matter of time. As we learned from an S-S announcement this week, rimonabant helps people quit smoking. It helps people lose weight. It increases "good" cholesterol. And it reduces abdominal fat. Yes, take this pill and get rock-hard abs. It all seems too good to be true, which is why we at the lab wonder why anyone expects it to be so. But then we have a horrifying thought. What if this drug works? What if it makes it through the Food and Drug Administration approval process? What if it does everything it's supposed to do without causing bizarre side effects like garlic breath and blue skin? The $40 billion weight loss industry (as per the Jenny Craig
2. We're Getting Very Near the EnronShed a tear, folks. Yet another chapter has ended in the story of Enron -- the symbol of all that was shiny and wonderful in American capitalism not long ago.
|The House Where Enron Bilked |
ChevronTexaco takes over the old digs
Slated to buy the old building and take Enron's place is ChevronTexaco ( CVX), making a move about which we have awfully mixed feelings.
On the one hand, we consider it somewhat inauspicious for an energy firm to move into a building so closely associated with an energy firm best known for its financial shenanigans and sham accounting. It's sort of like newlyweds deciding, "Hey, let's move into that house where that guy murdered his bride a few weeks after they moved in."
On the other hand, we're talking business, not marriage. In this context, ChevronTexaco's move is genius: If one company collapses in a pile of used office furniture, another takes its place -- at bargain-basement rates. And believe us, the geniuses are working overtime at ChevronTexaco these days. After receiving a $3.5 million tax break from the city of Houston, ChevronTexaco -- which had been all set to buy the Enron tower next week -- put the deal on hold, the Houston Chronicle reported Thursday. What was the problem? Apparently, that $3.5 million isn't enough, and ChevronTexaco is angling for a further tax break from Harris County, in which Houston sits. Ah, the chutzpah. The spirit of Enron lives on.
3. Pay It Again, SamSpeaking of tax-avoidance strategies and pharmaceutical breakthroughs, Samuel Waksal popped up again in the news this week. You remember Sam: He used to be chief executive of ImClone Systems ( IMCL), developer of the cancer-fighting drug Erbitux. Sam, you may also recall, is in jail -- or, as we like to put it, ImPrison Systems -- thanks to his poorly thought-out decision to try to dump his family's shares in ImClone in December 2001, based on insider knowledge that the FDA was giving the thumbs-down to Erbitux. Martha Stewart, of course, was convicted last week of lying to investigators about her activities in the wake of Waksal's sales at that tumultuous time.
|Sam Taxsal? |
The trade that takes and takes
4. Shell GameLest we think that Enron was the last company to fabricate numbers in the energy business, here come Royal Dutch Petroleum ( RD) and Shell ( SC).
As we learned this week from reading The Wall Street Journal and other sources, Royal Dutch/Shell executives realized two years ago that they had overstated the size of their oil reserves by a billion barrels or so -- but didn't get around to telling anyone else, including independent board members, until early this year.
|Reserve Size Really Does Matter |
A billion barrels here, a billion there...
Oddly enough, we can believe that when the discrepancy first arose, everybody involved probably thought it was small enough to get swept under the corporate rug. But as with other accounting discrepancies at other companies -- they traditionally start out small, but balloon over time -- the problem didn't magically take care of itself. By January, the oil and natural gas shortfall was up to 3.9 billion barrels, or 20% of Royal Dutch/Shell's latest announced total.
To borrow the expression often
5. Chary of CrossingFinally, hats off to Global Crossing ( GLBC), yet another example of a company on the way up.
This week, the telecom provider announced a flabbergasting $24.9 billion profit for the fourth quarter ended Dec. 31. Yes, billion with a "b." That's probably a record quarterly profit for any company anywhere, and we should all be very proud of them.
|Go-Go Global |
Bubble player still pitching