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Technology Stocks : JDS Uniphase (JDSU)
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To: Tunica Albuginea who wrote (22198)2/15/2002 11:00:35 PM
From: FR1  Read Replies (3) of 24042
 
Talk about bad accounting - did you ever notice what happens every day on CNBC with IPOs?

Let's take today. Pay Pal went up over 50% according to CNBC. They jump around with excitement about how much money the listeners could have made. Actually the most anyone of us would have made is 11% and that is if you were real lucky. Almost all IPOs are announced as being money makers when, in fact, everyone in the public loses money.

It works like this:
1) Insiders buy the stock at the pre-trading price, let's say $4/share.

2) On the IPO day, just before the public is allowed to buy, the market adjusts the price to reflect all the purchases by insiders, brokerage houses, etc.

3) The opening price is then $14/share.

4) The public starts to buy and the insiders dump stock big time to lock in their profits.

5) The stock ends the day at $8

6) The newscasts at CNBC jump up and down about how this stock performed astronomically - up 100% they scream & shout! When actually everyone in the public lost money. The honest answer is that the stock is down 43%

It is amazing these guys can get away with this while at the same time roasting people that give misleading financial information.

Don't tell me that CNBC doesn't know any better.
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