Random Walk

WE’RE just halfway through the Nineties, but even now it might be possible to identify the initial public offering that will be the worst deal of the decade, namely United States Enrichment Corporation. The good news is that USEC and its antecedents have a fifty-year history, and the company has a 40 per cent share of the world market for its product. The bad news is that the one shareholder is the U.S. Government; the USEC produces the most expensive enriched uranium in the world, and its business prospects are so bad that the offering, if it really gets done, should probably be itself classified as radioactive waste.

USEC’s president and CEO, William H. “Nick” Timbers, had a press conference in Washington early this month to tout the company’s privatization plan. But nuclear-industry insiders are calling the pre-selling process “dressing up the pig,” and even a cursory look at USEC reveals why. The company’s basic business is separating U235, the reactor and bomb isotope, from U238 and the other U’s that get in the way. USEC’s technology for doing this is the oldest in present use, since it was never upgraded. Why bother? The government was paying.

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WE’RE just halfway through the Nineties, but even now it might be possible to identify the initial public offering that will be the worst deal of the decade, namely United States Enrichment Corporation. The good news is that USEC and its antecedents have a fifty-year history, and the company has a 40 per cent share of the world market for its product. The bad news is that the one shareholder is the U.S. Government; the USEC produces the most expensive enriched uranium in the world, and its business prospects are so bad that the offering, if it really gets done, should probably be itself classified as radioactive waste.

USEC’s president and CEO, William H. “Nick” Timbers, had a press conference in Washington early this month to tout the company’s privatization plan. But nuclear-industry insiders are calling the pre-selling process “dressing up the pig,” and even a cursory look at USEC reveals why. The company’s basic business is separating U235, the reactor and bomb isotope, from U238 and the other U’s that get in the way. USEC’s technology for doing this is the oldest in present use, since it was never upgraded. Why bother? The government was paying.