Hi. Nine times out of ten, anyone who complains that they tried to talk to CFO X or CEO Y, but nobody will listen to them is probably a crackpot. I mean, the guy goes to Microsoft uninvited and offers to restructure their 401K and is surprised when they ignore him? Come on!
On the other hand, he may have a point. Specifically:
First of all, you make a $250 million investment in WebMD for an 11 percent equity stake and part of the deal is that WebMD commit to $100 million of advertising on MSN network. At the same time, Microsoft agrees to subsidize an equal amount in medical prescriptions for people using WebMD. Of course there are a few other interesting aspects of this transaction, of which I won't address in this report.
You have basically bartered a purely paper transaction and current accounting rules will allow you to recognize the entire $100 million as revenues for MSN network, even though you are just “trading checks.” That is, you are trading subscription subsidies for advertising revenues.
I think we need more details, like how did MSFT pay for WebMD. If it was by stock, then aren't they kind of reporting stock sales as revenue?
It's not fair to ask MSFT to report their 65 billion overhang as debt. They owe their employees stock, not money, so if their stock is as worthless as Parish says, then the debt is just as illusory.
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