I'm surprised at your lack of either candor or honesty, especially if you are really a CPA. At no time did ONSL try to exclude either the inventory problem or the marketing costs from their operating results. In the case of the inventory, the item was clearly included in the cost of goods section of the financials. In the case of the RCI payment, it was clearly included in the operating expenses section. In the case of the inventory, it was listed separately at the request of the outside auditors, due to its size and materiality.
Management has a requirement that they explain major items in the financials, and both items qualify. They were explained, not excluded. As a CPA, you would know that ONSL not only treated the items as required both by GAAP and the SEC, but were conservative in that treatment.
Once again, you ridicule a business plan you have never seen, ignoring the potential positive effects on margin of the travel and vacation packages as well as from a move away from company owned merchandise (see the analysis on both Motley Fool and ZDNet), as evidenced by the lower inventory levels at the end of this quarter. You ignore the example of other businesses regarding necessary margin levels to be profitable (around 2% for grocery stores as Mo Chips pointed out to you, and around 6% for Ingram Micro, one of ONSL's competitors both in the wholesale auction and computer markets). As far as we know, operating results are right in line with ONSL's business plan, and they are right on course for profitability in 1999.
My point is, as a CPA myself, I know how important it is to keep an open mind and make decisions/judgements based solely on fact. IMHO, you don't have enough facts to come to the conclusion that ONSL or the auction business are not viable in their current form, or that their business plan is a failure. Rather than convincing anyone, or helping the rest of the participants make decisions, you come across as someone with an axe to grind, invalidating any good points you might make. You end up with the credibility of our current fearless leader claiming Monica is a liar, and none of those terrible things ever happened <g>.
Just for the record, do you know af any company that has ever issued a statement like the one you suggested? It seems to me that it would be nothing but an invitation for Lerach and his fellow lawyers to sue. |
