Nick,
If you are being literal, there is a huge difference between a bubble and a fraud.
If cuc was a fraud, we will have one of the great, negative stock market stories in history. HFS will be destroyed by having bought it, and it would seem to me that Forbes is the problem, not Silverman.
It is insane to imagine that hfs would merge with cuc, knowing that business was grotesquely puffed up. HFS had a good business going. I don't care how egotistical we may imagine the parties involved were, it is not rational that hfs knew at the time of merger.
So, again, if there is much more fraud, anything could happen. The lawsuits to come alone will likely knock this to the low teens.
But if there is even twice as much, and they do earn 1.00 this year or next, it will have been a screaming buy in the teens.
Are we getting carried away imagining that these companies have manufactured there entire revenue stream withn creative and fraudulent bookkeeping?
This could be an incredible opportunity for a cold blooded investor. Can a core group of us generate some rational give and take as to whether this one is best avoided FOR A LONG TIME, or whether it will look like they will be the "salad oil scandal" of the 90's; a solid business, screwed up by sloppiness and fraud, and temporarily derailed, not permanently.
Is this bre-x or american express? |
