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Technology Stocks : Nortel Networks (NT)
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To: Michael W. Pittenger(Hijacked) who wrote (13832)4/30/2004 7:31:20 AM
From: tom pope  Read Replies (1) of 14638
 
I think that the net/net is a wash (or will be when the fog lifts - and it sure wasn't lifted at the CC). My thought was that they increased prior period losses perhaps by booking larger than needed valuation reserves, accelerating expenses or writing off inventory, or any combination of the above. These would then be reversed in subsequent periods when management wanted to trumpet profits.

The stock crashing can be explained by the realization by investors that the quarterly improvement in NT's financial results was less than had been reported, since the latest results were buoyed by the reversal of the excess charges (or whatever they were) taken earlier.
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