GenOn Energy, Inc. (GEN)

[smallfish7]

On August 24, 2011, Mark M. Jacobs resigned as President and Chief Operating Officer and a member of the Board of Directors of GenOn Energy. Effective August 25, 2011, Edward R. Muller, 59, Chairman and Chief Executive Officer of GenOn Energy, was appointed to serve in the additional role of President of GenOn Energy.


Item 8.01 Other Events.

On August 29, 2011, we entered into an agreement with the City of Alexandria, Virginia to permanently remove from service our Potomac River generating facility. The agreement, which amends our Project Schedule and Agreement, dated July 17, 2008 ("July 2008 Agreement") with the City of Alexandria, provides for the retirement of the Potomac River generating facility on October 1, 2012, subject to the receipt of all necessary consents and approvals. If all necessary consents and approvals have not been received by July 3, 2012, the Potomac River generating facility will be retired within 90 days after the receipt thereof. Upon retirement of the Potomac River generating facility, all funds in the escrow account established under the July 2008 Agreement shall be distributed to us, provided, that, if the retirement of the facility is after January 1, 2014, $750,000 of such funds shall be paid to the City. Currently, approximately $32 million is held in the escrow account. We do not expect any material diminution in the amount on deposit in the escrow account between now and disbursement of the funds to us. We do not expect the closing the Potomac River generating facility to have a material effect on our business, results of operations or financial position. The contribution of the Potomac River generating facility to adjusted earnings before interest, taxes, depreciation and amortization in 2011 has not been material and was not expected to be material for the remainder of 2011 or 2012. Further, We do not expect to incur significant costs related to closing the Potomac River generating facility

[chainma1l]

Decent volume this morning. I'm surprised there wasn't a BIT of a pop after the the nuclear problems in Japan possibly delaying (indefinitely) new nuclear power plants in the US.

[chainma1l]

Good volume today and some pps appreciation. This might have something to do with it, but hasn't been widely published. $5.25 isn't bad from the current level. I was originally thinking upper single digits, but I'm guessing they'll have to get some real performance under their belts as GenOn before they can move that much.



Citigroup is out with a research report this morning, where it upgrades shares of GenOn Energy (NYSE: GEN) to Buy/High Risk, from Hold/Speculative; it has a $5.25 price target on the stock, up from $4.50.

The Citi analysts cited their own upgrade of PJM capacity price forecasts, noting that they view the negative headline risk from the NJ bill subsidizing up to 2,000 MWs of new power capacity has passed.

The analysts anticipate PJM will file a Section 205 filing in the next few weeks with FERC to address the NJ legislation and ultimately believe FERC will adjudicate changes to the capacity market rules that will largely mitigate the capacity price impact of the legislation.

As for valuation, the analysts remarked, “For our EV/EBITDA valuation we use
2013E Open EBITDA and an 8.0x target multiple for the business. We have historically observed merchants trading in a cyclical range of 6.5x-10.5x over the course of the prior cycle, with a mid-cycle multiple of 8.0-8.5x. Our target multiple of 8.0x is in-line with the sector's mid-cycle EBITDA target multiple.”



Read more: http://www.benzinga.com/analyst-ratings/analyst-color/11/01/785886/citigroup-upgrades-genon-energy-to-buy-gen#ixzz1BPRygdAp

[kmx_swing]

My purchase was 3.88.
GeOn is too big to stay under five. Last two years nobody wanted power stocks. This is about to change. Despite all the shouts about the management competence.

[chainma1l]

Excellent volume yesterday. I was hoping for some pps appreciation, but I definitely like to see 10+ million shares per day trading above $4.

[chainma1l]

I agree. I traded MIR a lot over the years. I got in here a couple weeks ago. $4 or less should be a very profitable entry point.

[kmx_swing]

2011 should be a good year for GenOn stock.