1 Comment

  1. That letter from the Governor and others says absolutely nothing of real value. It fails to come close to addressing the subject.

    The hedge fund is interested in Duke Energy to make money. Their approach is to break the company up and prove the individual pieces are worth more than the existing whole. While that may be true, it does not justify their plan.

    Duke Energy has been growing through acquisitions for many years. Their idea is better efficiency in management. Why have so many CEOs, CFOs, and other top executives when one large utility can operate with just one of each? That makes sense to me.

    So, the problem is in communication and evaluation. If breaking up Duke is really economical, then the market is not properly valuing the business. Breaking it up is merely a ploy to make money more quickly for the hedge fund. There is nothing wrong with this, but the Governor needed to explain the real problem instead of just blowing smoke.

    The market will figure this out. The good news is the hedge fund is calling attention to the fact that Duke Energy is undervalued. That is also good. They own about 600,000 shares of the business so a price increase helps them for whatever reason. That is what hedge funds are all about.

    Suggesting the company be broken up is just a ploy to prod Mr. Market into waking up and looking closer at the value of Duke shares. It has created an opportunity for politicians to blow smoke. It seems to be a win-win. Was anyone hurt?

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