Most of the time, it was hard to tell that 2006 was a boom year.
The Federal Reserve stopped hiking interest rates, the stock market rocked and the economy grew. Yet much of the business news seemed good only in a relative sense.
General Motors did not file bankruptcy – as widely anticipated. Wal-Mart kept lowering prices, as its sales growth declined. United Airlines came out of bankruptcy. Qwest stock hit $8.45. Gasoline fell to $2.15 a gallon, and consumers, conditioned by $3 gas, now think it’s cheap. Oil companies reported record profits. And KFC said it would get rid of the trans fat in its fryer grease. Other highlights:
WorldCom’s Bernie Ebbers drove his Mercedes to prison. Enron’s Jeffrey Skilling began his 24-year sentence in Minnesota. Ken Lay went to Aspen and then to Heaven. All charges against him were dropped after he dropped.
The world’s second-richest man, Warren Buffett, agreed to give most of his money to the world’s richest man, Bill Gates. Their combined fortunes will go to health and education efforts around the globe.
About 60 executives have resigned, and 200 companies are under investigation for stock-option scandals. Jacob “Kobi” Alexander, the former chief executive of Comverse Technology Inc., fled to Namibia, where he is fighting extradition.
Google stock went to $513 a share, but slipped back to $462. The company, which paid $1.65 billion for a video-sharing website called YouTube, has a stock market value of nearly $142 billion. By contrast, Gannett, the nation’s largest newspaper publisher, is only worth $14 billion.
Another big stock story was Niwot-based Crocs, which makes plastic clogs that look like they are for little Dutch girls who can’t afford real wood. The company went public at $21 a share and now trades at more than $42. This puts the value of Crocs at more than $1.6 billion. In the first three quarters of the year, the company reported less than $44 million in net income, but who’s counting?
Not Boulder mother Sheri Schmelzer. She started making decorative pins that fit inside the holes of Crocs. She started a company, Jibbitz LLC, in her basement. Within a year she sold it to Crocs for $10 million, with the potential to make another $10 million if Jibbitz meets sale projections.
Private equity funds – with more than $1 trillion in assets – began buying up companies, including hospital operator HCA Inc. Need a doctor? No, you need a hedge-fund manager.
Hewlett-Packard lost chairwoman Patricia Dunn in an embarrassing boardroom spying scandal. She now faces criminal charges for her role in a caper in which investigators obtained phone records using assumed identities.
Median home prices, nationally and in Colorado, slipped for the first time in years, and Colorado’s foreclosure rate led the nation. Even so, 2006 will go down as the year the prices of some homes hit the $100 million mark. In Florida, Donald Trump put his Palm Beach estate on the market for $125 million. In Colorado, Saudi Prince Bandar bin Sultan bin Abdulaziz put his Aspen home on the market for $135 million.
Las Vegas casino mogul Steve Wynn accidentally put his elbow through the canvas of a Picasso, while showing it off to guests. Wynn had earlier agreed to sell the painting for $139 million. No telling what it’s worth with a patched hole. No worries. Wynn bagged about $147 million last month when his company, Wynn Resorts Ltd., announced a $6-per-share dividend.
See what I mean. It was a pretty good year.
Al Lewis’ column appears Sundays, Tuesdays and Fridays. Respond to Lewis at denverpostbloghouse.com /lewis, 303-954-1967 or alewis@denverpost.com.
