Amazon.com, Inc. (AMZN) Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Amazon.com, Inc. (AMZN)

AMZN 227.35

+0.3%

Dec 19 9:30 AM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Glenn D. Rudolph who wrote (18547)	9/26/1998 3:10:00 PM
From: Rob S.	Read Replies (1) of 164684

You often can't trust either the company or analysts to give you a correct picture of corporate earnings. First you have to trust management, who often has a large benefit in maintaining or propelling high valuations - so they can capture huge profits from stock options programs. An associate, who is a CPA and has been a corporate controller and connected to other CFOs and officers, and I personally have witnessed situations in which management "pulled-in" or "pushed-out" the numbers to exaggerate the quarterly sales, earnings, and margin figures. Many people have seen the tip of the iceburg of this type of activity when they are asked to accelerate billings or push out payables and other maneuvers that can often easily add or subtract 10%-20% to the apparent results. Sometimes the thinking is "things are going to be bad this quarter, we might as well dump everything we can into the numbers, guide analysts downward and then pump up next quarter's results which looks to be a seasonally strong period anyway. Then we can show much better than expected results and talk about new deals and products that will get the stock price up at the time our stock options are available to dump." Or vise versa. Then there are the analysts, most of whom are tied to the self interested brokerages that are supposed to look out for investors. Sometimes their is an apparent conflict of interests. The firm the anals work for may serve as investment bankers for the firms they follow. Sure there is supposed to be a seperation of the functions in the firm, but it doesn't always work out to be so objective. Say a major brokerage is the lead underwriter of an IPO or a secondary offering. Their job is to help determine a valuation for the stock, push the offering out among up to thousands of brokers, and "support the offering" through their institutional and retail channels. Yes they understand a lot about the workings of the companies but one of their chief jobs is to sell stock of the companies they work for. They also stand to benefit handsomely if their own holdings and the portfolios of their large insitutional and private investors do well. I have personally been told of situations in which major brokerages were maintaining buy ratings on sectors and stocks while they began advising their large clients to go to cash or go short. That advice followed with downward revisions of estimates and ratings and large drops in the stock prices. How many people have noticed how often their favorite stocks often start to drop (or rise) in price a few days BEFORE a major announcement is made? Sometimes these things catch at least some of the analysts off-guard but often they are warned by the CFO, CEO or board memeber even while the investor relations department is saying "everything is fine as far as I know - no official announcement is about to go out." Who can you trust? Those with their hands deeply into the til?

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next