In Business This Week: HEADLINER: DAN DORFMAN
The new year got off to a rocky start for Dan Dorfman, the TV and magazine stock tipster. On Jan. 1, Money magazine fired its columnist for refusing to disclose to his editor the sources he uses in reporting his columns.
Dorfman had been on paid leave from the magazine since BUSINESS WEEK revealed in October that Dorfman and stock promoter Donald Kessler were being investigated by the U.S. Attorney's Office in Brooklyn for possible securities-law violations and wire and mail fraud. Money Managing Editor Frank Lalli says he asked for Dorfman's sources "to maintain my confidence in the quality of the information we publish." In a statement, Dorfman said he couldn't comply with Money's "sweeping demands."
Estimates put Dorfman's income at more than $1 million a year from speaking fees and salaries from CNBC television and Money. CNBC has continued to air Dorfman's daily stock reports, and a spokesman said that the network still sees "no reason to believe that Dorfman has violated the law."EDITED BY KEITH H. HAMMONDS By Michael SchroederReturn to top
JUICING UP WESTINGHOUSE
CHAIRMAN MICHAEL JORDAN of Westinghouse Electric is hurrying to drive up the company's long-suffering stock--and keep media-hungry raiders at bay. As 1996 began, he put in a poison-pill provision to raise the cost of taking over Westinghouse and its newly acquired CBS. Two days later, he announced the $3 billion sale of the company's defense-and-electronics division to Northrup Grumman. Jordan has raised $4.2 billion from asset sales. Now, he expects to pay down 65% of the debt he took on to buy CBS last fall. Equally important, Jordan's pitch that Westinghouse is undervalued seems to be finding believers. Following the Northrup announcement, Westinghouse shares rose 7.3%, to a 12-month high of 18 3/8.EDITED BY KEITH H. HAMMONDSReturn to top
CHRYSLER: HOW BIG A BUYBACK?
JEROME YORK PUT ON A GREAT show. In a speech in Detroit on Jan. 2, Chrysler's former CFO--now point man for billionaire shareholder Kirk Kerkorian--suggested that Chrysler could afford to buy back $2 billion in stock a year. The crowd ate it up--but missed the best part: York said later in an interview that Chrysler could spend up to $9 billion on buybacks through 1998. Chrysler Chairman Robert Eaton's response: "I don't think Jerry York knows what he's talking about." But York sensed a different reaction from investors. "They didn't exactly throw tomatoes, did they?" he quips.EDITED BY KEITH H. HAMMONDSReturn to top
A TAX BREAK IN THE SKY
THE BUDGET IMPASSE IN Washington may have ruined the holidays for hundreds of thousands of federal workers, but it brought cheer to air travelers. The 10% federal excise ticket tax, which expired on Dec. 31, hasn't been reauthorized by Congress. So some carriers, among them American Airlines and Delta Air Lines, have reduced ticket prices 10% since Jan. 1. Washington probably won't try to collect the tax retroactively, says one House aide--unless the impasse drags on for several more weeks. The government stands to lose $13 million a day.EDITED BY KEITH H. HAMMONDSReturn to top