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Thursday, March 5, 2009

It does not compute

Here we are with the stock market at historic lows. So now's the time for PGE to make a public offering of stock so that it can pay off debt?

Comments (9)

If PGE wants to issue more stock to pay off its debts instead of raising rates, I say, "More power to it."

If your expectation is that the price will drop even further, and it would be even harder to make a public offering in the future, then it makes perfect sense.

PGE is trying to make its stock price so low that Erik Sten can buy with the profits from his West Hills house sale.

No wait, Portland's former housing expert lost money on his house sale. Oh well.

Didn't you ever play Monopoly? Utilities are traditionally the safest sort of stock because they pay a regular dividend ( you know before deregulation and Enron and all that). At least that is the way it used to be. I'll be there is a lot of pent up demand for a regular paying dividend these days.

to add to John's comment, issuing stock right now when the market's this low... There's probably some upside there when the market bounces back - sounds like a decent investment opp actually.

Yeah, and at the same time nowadays, the Fed Reserve is issuing par value $1-denominated 'instruments' capitalized at historic lows, around 60-cents below par. If that.

What about the PGEnron employees whose retirement pensions went pfffft! -- could they get free-issue shares as recovery? I thought Kroger prosecuted wanton Enron; did he squeeze some juice out of that big fish? Pay to the people.

Not too many years ago, I heard that Bonneville dam was built with a $2 billion loan 'from the feds.' And after all these years, using payments from bulk-buy (PGE)utility contracts, all the cash has applied to interest only and not a penny has paid down the principal. T or F?

Future electric utilities, (are robots 'utilities'?), should be out of power generation and into loan arranging (like banks). 'Power co-ops' (like Citizen Utility Boards) could underwrite front money to finance homemade electricity generation stations, (then residents detach from the grid), and get the loans paid back (to recirculate in re-lending) at about 100 bucks a month = +/- = an ordinary electric bill, (but buying property-improvement equity instead of dam complicity). [Let's see ... $100 on 240 months is $24ooo, which could be $12ooo principal and $12ooo interest. T or F?]

16m shares on about 60m-ish outstanding is fairly dilutive. Not surprising to see POR down on the news. Still, that 98 cent dividend looks pretty nice and fat now at about 6.5%. Hard to imagine PGE is going out of business anytime soon...people still need electricity. I'm not sure how other utilities' secondary offerings have done in this market, but I suppose it's possible that PGE's could be well received and subsequently see a rise in share price. This stock might not be a bad place to stick some cash and collect those dividend checks - much better return than CDs or savings accounts these days. How much downside could there be left in this type of company anyway?

How much downside could there be left in this type of company anyway?


Looks like the additional news about the offering on Friday was well received.

Rettig: that's a good point - especially with what we saw with Enron, but I meant near-term downside in terms of stock price - given that nothing catastrophic (as with Enron) happens, which would seem highly unlikely at this point and a safe assumption - or at least my assumption.

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