Business & Finance
Shares in Electronic Data Systems Corp. (EDS) plunged 29 percent to a 14-year low of $11.68 Tuesday on the New York Stock Exchange amid worries of a cash crunch. The credit rating of the world's second-largest computer services company also was cut by two leading agencies and a "sell" advisory was issued by Merrill Lynch & Co. in the wake of last Friday's disclosure that it paid $225 million to settle options and forward contracts from a risky hedge strategy that backfired. EDS, based in Plano, Texas, was founded in 1962 by billionaire H. Ross Perot, although he sold it in 1984.
Troubled media giant Vivendi Universal was expected to announce the resignations of at least three members of its board and the opening of negotiations with the highest bidder for its publishing division, the world's third-largest. But the Paris-based conglomerate would not identify the prospective buyer. Meanwhile, the latest Vivendi subsidiary to go in a sell-off of assets will be Canal Plus Technologies, a spokesman said. He said the provider of digital and interactive-TV software is being acquired by electronics manufacturer Thomson Multimedia of Boulogne, France, for $186 million. Vivendi owes creditors $34 billion, and its new chief executive is preparing to unveil his strategy for returning the company to profitability.
Two former executives of online realtor Homestore.com, are expected to plead guilty to securities fraud and a third to insider trading in a deal with federal prosecutors, published reports said. In return, the three will agree to cooperate in an investigation into complicated deals that allegedly inflated revenues through a practice known as "round-tripping." They reportedly also will cooperate in separate, higher profile inquiries into one of Homestore's business partners, AOL Time Warner. Homestore is based in Westlake Village, Calif.
Duke Energy Corp. announced a $1 billion public offering, which it said would be used to repay debts from its acquisition of Canada's Westcoast Energy. The Charlotte, N.C, utility cut its 2002 earnings estimate Friday. Duke said it plans to sell 52 million shares next week and would give underwriters a 30-day option to buy 7.8 million more.