Yardeni before the senate (once again the Fortune article including TAVA is mentioned ;-))
It will be interesting to follow the SEC filings the coming months... SEC becoming more and more critical and demanding (for detailed disclosures). Shorting stocks of co's that do not look too good becomes an option IMO.
John
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senate.gov
'I can't stress this enough: The biggest risks confronting investors are not the costs of fixing Y2K in 1998 and 1999, but the much greater costs of business disruptions, malfunctions, and outright failures in 2000. It is precisely this vitally important information that is missing in every one of the reports I read. The fact that most companies chose to completely ignore Y2K in their quarterly filings--or simply copied the statement from the annual report--suggests that they have no intention of keeping their investors informed about their progress, or lack thereof.
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Form 8-K. A company's Year 2000 costs or consequences may reach a level of importance that prompts it to consider filing a Form 8-K. At their option, companies would file these reports under Item 5 of Form 8-K. In considering whether to file a Form 8-K, companies should be particularly mindful of the accuracy and completeness of information in registration statements filed under the Securities Act that incorporate by reference Exchange Act reports, including Form 8-Ks.
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Automotive & Construction Equipment
General Motors discusses Y2K in its annual report, but the topic is not mentioned at all in the subsequent quarterly filing. GM states that it spent $40 million during 1997, mostly to assess the problem. It expects to spend about $360 million-$500 million on the remainder of the project, with the majority expected to be incurred in 1998. GM's "target date for completing its Year 2000 modifications is December 31, 1998, with additional testing and refinements to identified systems planned for 1999." The company acknowledges that the "inability of GM or significant external interfaces of GM to adequately address Year 2000 issues could cause disruption of GM's business operations."
In the April 27, 1998, issue of Fortune, Ralph J. Szgenda, the chief information officer of General Motors, said that there are "catastrophic problems" in every GM plant. I called the reporter to verify this blunt quote, and was informed that the word "catastrophic" was repeated several times during the interview with GM's top IT man. Of course, the word "catastrophic" does not appear once in GM's all-too-brief discussion of Y2K in its annual report. I wonder why GM did not update investors on its progress in its quarterly filing. Is the company on schedule to finish most of the project by the end of the year? What about its vendors? Which ones are at risk of failing to meet the millennium deadline? What about GM's Asian vendors, given that the turmoil in that region may be distracting many companies from giving enough attention to Y2K?
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Intel, in its annual report, admits that it was still "assessing the capability of its products sold to customers over a period of years to handle the year 2000 and has a plan in place to address product issues during 1998." Yet "management believes that the likelihood of a material adverse impact due to problems with internal systems or products sold to customers is remote and expects that the cost of these projects over the next two years will not have a material effect on the Company's financial position or overall trends in results of operations." Notice that only the "next two years" were mentioned. What about 2000? Intel's most successful products are microprocessors, logic devices that act on information provided by other parts of a computer system. The company states, "There are no specific date functions in Intel processors. All Intel processors can handle dates in the 21st century. The assessment of whether or not a complete system will operate correctly in the 21st century depends on the BIOS capability and software design and integration."(9)
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Citicorp will spend $600 million from 1997 through 1999. In other words, it only started last year. It spent $230 million so far: $80 million during the first quarter and $150 million in 1997. There is no mention of the fact that Citicorp does business in more than 100 countries, or what the risks are to the company if telecommunication, electric utility, and other vital systems fail to work in some of those countries in 2000.
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