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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: stomper who wrote (144891)1/20/2002 11:06:25 AM
From: Earlie  Read Replies (1) of 436258
 
Stomper:

Delighted you provided that article, and particularly pleased to see the Cisco reference.

I wrote about Cisco's acquisition binge, pointing out that (a) it was essentially "purchasing revenues".
(b) it was paying too much for those revenues (consequential dilution, even when the company's stock was in the stratosphere).
(c) it was bringing the assets of the purchased companies on board at massively "written down" values, which created the huge, artificial, follow-on (but short term only) profits.
(d) many of the acquired companies appeared to provide minimal synergy.
(e) many of Cisco's acquisitions included other forms of accounting sleight-of-hand.

Not many bothered to check out the validity of those comments.

I expect to see very similar articles about several other technology companies before long, particularly MSFT and IBM, as both employ "questionable" (to remain polite) accounting practices. One of the worst of these is the employee option game, as perfected by MSFT.
In IBM's case, the transfer of incoming cash derived from the sale of company subsidiaries to the SG&G line boggles the mind. It would please me to see the auditors who approved these forms of semi-fraud dragged into the courts.

Best, Earlie
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