Clown-Free Zone... sorry, no clowns allowed Message Board

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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: Nathan who wrote (68004)	2/15/2001 3:47:19 PM
From: Earlie	Read Replies (1) of 436258

Nathan: About 18 months ago, I wrote a fairly lengthy piece on IBM's accounting shenanigans. It upset the IBM brass sufficiently that shortly thereafter, an analysts' conference was convened wherein each and every one of the criticisms I levelled at Big Blue were addressed, albeit rather lamely (I had a ball rebutting their silly arguments). Even back then, it was obvious that IBM's day of reckoning was drawing closer. Revenues had shown little or no growth for many quarters, earnings were flat (in spite of the accounting B.S.), the balance sheet was imploding and shareholder equity was vanishing. Louis had even back then, made use of questionable tax assumptions, pension fund clipping, extreme front-end booking of multi-year "service" contract revenues, SG and A treatment of the sale of assets and stock buy-backs, etc (the list is much longer) to nurse his share price into the nether regions. IBM will take it in the throat when he finally runs out of either borrowing room (which is close) or new accounting dodges. Yes, I see this as inevitable but darned if I can call the timing. I would bet that it occurs this summer, but remember the nick-name. (g) Best, Earlie

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