"(my column was distributed on AOL in those days) identifying Time Warner as one of two shorts of that year."
By: meatloaf
Reply To: 20976 by xcit Thursday, 18 May 2000 at 1:08 PM EDT
Post # of 21738
Thx 4 the post, XC. You know, that reference to EBITDA, while sensible, might draw a little flack, but let me share with you a little experience on this issue.
Around this time in 1997 (May-June), Time Warner started reporting its operating results in this fashion (pre-interest due to the crushing level of debt Time Warner had, and pre-amortizatn due to its equally big number). I thought I was pretty hot shot analytically so I published a piece (my column was distributed on AOL in those days) identifying Time Warner as one of two shorts of that year. In fact, that was the lead-in my production manager wrote for that day's syndicated article.
I had genuinely thought that I had uniquely identified an accounting flaw when in fact what was really identified was a more relevant method to convey operating results to the investment community. Since Ziasun has no long term debt, an EBITDA reporting appears even more meaningful.
Here's the real experience bad news (if memory of stock price serves correctly): The stock was around $45 / share at that time. But it went on to split 2-for-1, and now sells for $82, which means anyone who went short by borrowing 1,000 shares at $45,000 was now short 2,000 shares and "upside-down" on that trade by more 100 grand.
Not one of my better calls, however, before the heat turns up on this format of ZSUN reporting operating results, beware that there is some compelling market precedent for this.
ragingbull.com
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