09/01/04 - SEC Investigates United Rentals' Accounting Records

September 1, 2004 • United Rentals, Greenwich, Conn., announced on Monday that the Securities and Exchange Commission is conducting a non-public, fact-finding inquiry of the company, and the notice issued by the SEC was accompanied by a subpoena requesting the company to produce documents relating to its accounting records. The announcement did not specify the scope or specific purpose of the inquiry.

 

According to the Motley Fool, the SEC inquiry has discounted United Rentals stock by 26 percent since Friday. In February, the company announced restructuring charges, asset write-downs, and refinanced 2.1 billion in debt at lower interest rates with longer maturities.

 

Little is known about the investigation by the SEC, but it has caused Standard & Poor's to put the company's credit on watch for a downgrade. However, with its debt refinancing behind it and United Rentals' outlook focused on generating cash, there may be little that the SEC can do to keep the company from recovering. Selling at a new 52-week low, the United Rentals' stock is a speculation until the SEC's concerns are identified.