Dale:
Well over two years ago, I wrote a piece that "examined" IBM's accounting. It was, I believe, the first public commentary that criticized the company's highly questionable accounting procedures and assumptions. It was also highly critical of management, hence it earned me the threat of a suit (delightfully, shortly thereafter, David Tice's gang did a far more detailed analysis of IBM's accounting legerdemain, which took me off the hook). At the time, I suggested that without the fancy accounting, IBM's financials did not come within a country mile of supporting its (then) current share price.
Since then, the company's main lines of business have deteriorated further and questionable accounting is no longer accepted. Worse, Gerstner squandered the company's debt-raising capability to buy back the company's stock at insane prices, so its balance sheet is precarious. Now, even the N.Y. analytical crowd are becoming aware of its worrisome state. The stock price has no place to go but down.
Best, Earlie |
