The Shelf
Contributions
Help make Wikinvest better! Learn how to get involved. And create an account to build your reputation.
Did you know…?
Bookmarks
close
Edit Metric
Company
Value
Source
Source URL
Notes
Cancel
 
close
Edit  |  History
Details
Company:
Value :
Source:
Source URL:
Notes:
 

Add a New Bears Reason
Company: Eaton (ETN)
Current price:
Headline: (100 character max)
Analysis:
Cancel
0%
agree
1 votes

edit Negative credit watch by Fitch; what will potential recapitalization do to share price?

Created when ETN was $80.03 | Edit | History

Eaton has financed the $2.8B acquisitions of Moeller & PhoenixTec with a $3B floating rate credit line that expires January 2009. The day after the acquisition announcement in December 2008, Fitch placed ETN on negative credit watch.

Management on the April 14, 2008 1Q earnings call admitted they are still figuring out best way to recapitalize to bring the balance sheet back into target capital structure of 35% debt.

It appears doing so will result in a minimum dilution of at least 20% under most optimistic assumptions.

Eaton appears to face a conundrum: high debt in a tight credit market vs dilution in a volatile equity market.

(100 character max) Cancel
Worried about pump and dump?
We review changes
for stock spam
» read more
Want to make Wikinvest better?
We need your help,
contribute today
» learn how
Do you write software?
We are recruiting
the best engineers
» view jobs
Like Wikinvest?
Spread the word —
Tell your friends!
» spread the word
Wikinvest © 2006, 2007, 2008. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki