Planes and Brains

Feeling bullish on Memphis? Two new companies are selling stock.



Just in time for the holidays, two new Memphis companies are going public with stock offerings, hoping to become mainstays of the airport and the medical center -- or what's left of it -- for years to come.

This week, Pinnacle Airlines Corp., a subsidiary of Northwest Airlines, went to market with 19.4 million shares, priced at $14. Buy some and you'll own a piece of one of the country's largest regional jet services based out of Memphis, Detroit, and Minneapolis. Northwest bought Pinnacle in 1997 and gave most of the stock to its pension plans in 2002 and 2003. The CEO is Philip Trenary.

Risk factors listed in the prospectus include possible terrorist attacks, labor unrest among Pinnacle's 2,438 employees, competition from Mesaba and other regional jets, more debt than capital, and heavy dependence upon Northwest.

On the plus side, business is good, on-time performance is among the best in the industry, service is offered to 76 cities and 29 states, and there's a sweetheart deal with the Memphis and Shelby County Airport Authority. By increasing its fleet and juggling routes, Pinnacle expects to grow a measurement called "available seat miles" 24 percent a year through 2006.

A second Memphis company, GTx, is the brainchild of AutoZone founder J.R. "Pitt" Hyde III. Its business is applied medical research into new drugs to treat prostate cancer, which Hyde himself has beaten, and other types of cancer. It is expected to start selling shares to the public in December or early in 2004.

GTx has actually been around since 1997 but has only 43 employees and a low profile. That will change after the stock goes public, and if the company is successful in partnership with the University of Tennessee medical school, it could remake the site of the old Baptist Hospital and the medical center in several years.

GTx has no revenues. In the start-up stage, investors will be betting on UT's brains and intellectual property and Hyde's business savvy and dedication. The stock price won't be set until just before the offering.

Herenton scolds MLGW in letter

Add Mayor Willie Herenton to the list of Memphians frustrated by Memphis Light Gas & Water. And that could be bad news for the utility as it seeks approval for a rate increase next month.

In a letter to members of the City Council and MLGW president Herman Morris, Herenton says he has "yet to understand MLGW's need to advertise and support costly promotions when, in fact, it is the exclusive service provider. Consumer information that is useful to the citizenry is understandable."

MLGW's "Hometown Energy" campaign extols the wonders of a public utility working tirelessly for its customers. The trouble is, for years many of those customers have had a devil of a time contacting the power company when they have problems. The city has requested help from FedEx in developing a call center for all of city government and its entities, including MLGW.

"It also concerns me that Memphis Light Gas & Water has invested approximately $30 million in an automated billing system and CRM [Citizen Relationship Management] application that apparently has problems," Herenton wrote.

The mayor said he intends to provide the council "with some pertinent information that will be helpful during the upcoming MLGW hearings."

The council meets December 2nd. At this point, MLGW's rate-increase request has been denied, and Morris has not yet been named by the mayor for another term as president.

Calvin Williams Defense Fund

As chief administrator of the Shelby County Commission for four years, Calvin Williams was in a position to do favors for a lot of people. Now that he's been indicted for official misconduct, Williams is asking friends to help pay for his legal defense.

In a letter this month from the "Friends of Calvin Williams," potential donors are asked to make contributions by a bipartisan list of signers including zoning attorney Homer Branan III, local GOP activist and attorney David Kustoff, attorney Richard Glassman, the Rev. Lasimba Gray, suburban developer Jackie Welch, and George Reems -- a former employee of the Circuit Court Clerk's office who was involved in a moonlighting venture with Williams that got both of them in trouble.

"I have spent the last 20 years of my life helping others in the community," Williams says in the letter. "I'm sure that I have helped you in some form in the past."

Williams resigned under pressure from his $101,856 job as commission administrator in January. He was indicted on state charges in October. He has been given a lower-paying job in the county's Equal Opportunity Compliance Office.


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