Shearson's quarterly charge may grow with plunge in Computervision shares
Article Abstract:
Share prices of Computervision Corp stock fall 35 percent, making it likely that Shearson Lehman Brothers Holding Inc will have to take a $100 million pretax charge. Shearson sold the Computervision stock to the public in Aug 1992, six weeks before the plunge and the securities broker took a $137 million pretax charge during the 2nd qtr. Additionally, Shearson has had to forgo over $83 million of Computervision loan interest. Shearson assisted JH Whitney Co in financing a leveraged buyout of Computervision in 1989, but conditions in the junk bond market made it impossible for Shearson to sell its $500 million loan. A Shearson official says that the brokerage house owns 22 percent, or 10.5 million shares, of Computervision. Because of Computervision's poor performance, some industry observers question whether or not Shearson met its legal obligation to disclose the computer company's true financial condition in the offering prospectus.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1992
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For Stratus, clouds gather in previously sunny skies; sales growth slows as competitors' computers become more reliable
Article Abstract:
Stratus Computer Inc increased its revenue by 9.6 percent for the quarter ended Jun 28, 1992, after 11 years of double-digit growth and industry analysts fear more trouble for the manufacturer of fault-tolerant computer systems. Stratus is known for manufacturing systems that are 99.999 percent reliable and its machines are widely used in the telecommunications and banking industries. Recently, Stratus has experienced difficulty because it selected an unpopular Intel Corp microprocessor for its new line of computing products and has to change the microprocessor to an HP product. Stratus faces competition from companies that build increasingly reliable systems, and analysts believe that prices could fall. Stratus' growth rate has fallen from 44 percent in 1988 to 11 percent in 1991. The company has begun a marketing campaign to emphasize the advantage of using its computers over products that are only 99 percent reliable.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1992
User Contributions:
Comment about this article or add new information about this topic:
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