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Sounds like AES customers can look forward to a doubling in their rates.
yep
Even before this news, I believe all utilities should be required to hold the line on rate increases for current customers and not do anything to pass the cost of new power generating infrastructure related to data centers. Those new customers should be required to pay the entire cost of new plants, etc. So it goes with this acquisition deal – it should be contingent on that obligation.
As the reporting required by a publicly traded company disappears, you can expect even less transparency from AES. But even before the sale, AES was good at “outsourcing” services to south American divisions in a technically legal way to transfer profits out of the US.
AES acquired IPL in March 2001. Anyone care to guess the total return on investment for an IPL shareholder who exchanged their shares for AES stock at the time of the merger 25 years ago?
I think the share price was $80 share at the time of the AES acquisition. Then Enron happened and the stock went in the toilet, maybe $1 a share. When I worked there from 2005 to 2017 it hovered in the $15-30 range. As a former employee, I never understood why anybody would buy AES stock. There was a few years it paid a dividend, but other than that it was supposed to be a “growth” stock but the value of the holdings never really grew.
The biggest swings I ever saw in the stock was through self induced company manipulation. AES employee bonuses were paid in AES stock. Management would start to buy up stock towards the end of the year. The price would go up 15-30%. The bonuses got paid and because the executives knew exactly when the transfer was done, they would immediately sell their shares at the inflated price, and the price would immediately drop below the yearly average. They whistled to the bank while grunt level employees who received a $25k bonus that was now worth $15-20k, waited for the stock to recover holding onto a “growth” stock that never really grew. On paper they had a really good bonus program.
This is whole transaction is another part of the AI bubble and I think this was a way to cash in before the bubble pops.
I think the absolute answer is your $80 IPL investment got you about $33 today, along with a few years where you got a $2-3 dollar dividend.
Equity companies buy companies to take them private, strip the company, then resells it or makes it public again so they can reap more fees.
In this case I think they are looking to be holding power generation capacity when AI is going to demand huge amounts of power. They see huge a huge new market creating extraordinary demand and want to cash in on that.
They want to control the power grid and force our hand to pay for data centers. End of story.