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Week in review

Top 10 Stories / Nov. 6-10

November 12, 2000|Davan Maharaj and Myron Levin and Chuck Philips and James Bates and Charles Piller and Karen Alexander and Nancy Rivera Brooks and Elizabeth Douglass and Sharon Bernstein

1. Silent' Tire Recall Claimed: For more than four years, Goodyear Tire & Rubber Co. has quietly replaced thousands of failed tires fitted on vans, light trucks and sport-utility vehicles and wrote checks to customers, but only for those who complained, The Times reported. Critics say the Akron, Ohio, tire maker is engaged in a controversial practice known as a "silent recall" and placing thousands of drivers and passengers at risk by not declaring a full public recall on Load Range D and Load Range E tires. Goodyear denied that it was conducting a silent recall, saying it was simply providing "customer satisfaction" replacements on a case-by-case basis. The National Highway Transportation Safety Administration said it was stepping up an inquiry into at least 15 deaths and 120 injuries linked to Goodyear's 16-inch Load Range E light-truck tires.

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2. Setbacks for Cigarette Makers: Big Tobacco got a double dose of bad news Monday, when a Florida judge affirmed a record-shattering $144.8-billion punitive-damage award for sick smokers, and the European Union filed suit against three leading manufacturers, accusing them of abetting cigarette-smuggling operations that have cheated member nations of taxes and import duties. In the Florida case, the major cigarette makers will now seek review by a state court of appeals. The EU case was filed in federal court in New York against Philip Morris Inc., R.J. Reynolds Tobacco Co. and Japan Tobacco, which last year acquired Reynolds' international operations.

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3. Bertelsmann Follows Shake-Up With Move on EMI: Making its third dramatic move in less than two weeks, Bertelsmann approached British music giant EMI Group with an offer to combine the two conglomerates. Both corporations confirmed the merger proposal, but indicated that no detailed discussions had yet taken place. The proposal came just four days after Bertelsmann Chairman Thomas Middelhoff announced a decision to replace his top two music executives and overhaul Bertelsmann's entire record division. And news of the management shake-up came less than a week after Middelhoff stunned the music industry by announcing his plan to join forces with the controversial Napster file-sharing service.

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4. Ad Skittishness, Sagging 'Millionaire' Hurt Disney: Walt Disney Co. shares fell nearly 16% on Thursday after the company warned of flat profit for its fiscal first quarter, signaling Wall Street's growing concern about a softening TV advertising market and slipping ratings for ABC's "Who Wants to Be a Millionaire." Investors pushed the stock down $5.75 to $31.13 despite Disney's report of a stellar turnaround for the latest quarter and full fiscal year. Disney lowered its expectations for the first quarter because of concerns about the advertising environment and its ailing consumer-products unit. The ratings for "Millionaire" are off about 30%, but Disney noted they are still strong and said special events are planned to boost the show. Disney stock closed the week at $31.69, up 56 cents, on the Big Board.

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5. Chip Maker Shines in IPO: Ignoring the recent malaise among semiconductor makers, investors jumped on the initial public offering of stock for Transmeta Corp., a chip firm that competes with Intel Corp. in the portable-computing and information-

appliance markets. Transmeta shares surged on the company's first day of Nasdaq trading Tuesday to close at $45.25, up $24.25 from the IPO price of $21. The strong showing represents one of the most successful tech IPOs this year. Investors seem to buy company claims that its processors will be important in the nascent market for wireless Internet appliances. Transmeta closed the week at $40.94 down $3.38 amid Friday's steep drop on Nasdaq.

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6. Broadcom Rides a Rough Week: It was a roller-coaster week for Broadcom Corp. The Irvine-based communications chip maker on Monday announced its most expensive acquisition ever. But the $2.04-billion stock deal to buy Santa Clara, Calif.-based SiByte Inc. rapidly withered in value, as Broadcom's stock price fell by about 30% in the next two days on concerns that customer Cisco Systems Inc. would be cutting its inventory. Broadcom Chief Executive Henry Nicholas III sought to stop the bleeding Thursday, telling investors that he was confident Broadcom would meet analysts' earnings expectations for the quarter. The stock rebounded a bit by week's end to close at $166.25, up $3.81, on Friday on Nasdaq.

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