Stock watch

Published: May 28, 2006

Eagle
This week's eagle is flying high after doing a little squawking. Pre-Paid Legal Services Inc., an Ada-based multilevel marketing company, climbed 10 percent last week to close at $35.60.

The ascendance came after company Chairman, Founder and Chief Executive Officer Harland Stonecipher fired off a letter denouncing short sellers, whom he claims have conspired to sabotage Pre-Paid.

The company has long been a target of shorts, who borrow shares and sell them hoping they can profit by replacing the borrowed shares with stock bought at lower prices. Pre-Paid is the most shorted stock on the New York Stock Exchange based on how many days it would take for the shorts to cover their 5-million-share position at current average daily trading volumes.

For years, Stonecipher has accused shorts of manipulating regulators, trial attorneys and reporters to harm Pre-Paid and drive down the stock price. In his letter, Stonecipher even authored his own version of how he believes reporters should reflect Pre-Paid's triumphs over injustice.

The letter's scornful tone apparently didn't dim the enthusiasm of the Pre-Paid faithful, who bid the stock price up more than $3 over the last five trading days.

Beagle
Youngsters -- companies and dogs -- can be unpredictable.

The fledgling Alliance Holdings GP LP raised $313 million in an initial public offering this month. But last week, the partnership's units shed 12.5 percent of their value. The common units, priced at $25 in the May 17 IPO, opened last week at $24 and slid to $21 by Friday's close.

Alliance Holdings' assets consist of its partnership interests in Alliance Resource Partners LP, a Tulsa-based partnership that produces and markets coal to major utilities and industrial users. As an energy-based company, Alliance Resources has benefited from soaring commodity prices, and corporate officers likely were counting on investors' current enthusiasm about energy to support the IPO.

While last week's price slump may be only temporary, Alliance Holdings' experience may give pause to several other Oklahoma energy concerns that are poised to launch their own initial public offerings.

Eagles and Beagles is a weekly look by Business Writer Don Mecoy at a high-performing (eagle) and a low-performing (beagle) stock.