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Technology Stocks : InfoSpace (INSP): Where GNET went! -- Ignore unavailable to you. Want to Upgrade?

To: mikiespeedracer who wrote (26475)	8/13/2001 6:37:44 PM
From: tahoe_bound	Respond to of 28311

As did many ex GNET execs Break the rules that is, IMO. GNET too, never once showed a profit that did not have the now infamous "pro forma" tag along side, and the execs ran off with the bank as well, likely never to be heard of again. There is lots of blame to go around, but then again, the #1 rule of the market has always been caveat emptor, personal responsibility can't be ignored forever. The "crowd" or group mentality also shares in the blame, letting these guys have a free pass for so long when times were good (or so the facade made believe) and fostering a giddy greed and hope mentality, drawing in others who left objectivity by the wayside by and large. The cheerleading was nauseating at best. Yet, there is still a sense of complacency, indicating a lot more pain to come. For example, in J. Jubak's recent piece on Cisco, he nailed it right on: "Pro forma net income was $163 million or $0.02 per share for the fourth quarter of fiscal 2001, compared with pro forma net income of $1.20 billion or $0.16 per share for the fourth quarter of fiscal 2000, decreases of 86% and 87%, respectively. Technically, Cisco met expectations. But I think it's important to see where that 2 cents a share in earnings came from. Not from operations, that's for sure. Cisco's operations -- its business -- generated a paltry $28 million in operating income. That's equivalent to just four-tenths of a cent per share. The bulk of Cisco's profit actually came from the bank. The company earned $199 million, or 3 cents a share, in interest payments on its cash balances. When most of a company's earnings result from an activity that's ancillary to a company's main business, analysts raise a red flag and start to talk about the quality of earnings." More pro forma smoke and mirrors. Gonna get uglier, again IMO, especially when it becomes apparent there is no quick fix to the earnings drop off (quality and otherwise) and resulting credit crunch. So many singing the same tune, so much complacency that they all have it pegged as to when and how the great turnaround is imminent. Frightening. Lastly, nice piece in IBD recently defining "penny stock" status. Used to be in the old days pre '87 crash, the benchmark was under $1. Most firms now define $5 and under as the demarcation, no real institutional interest is present under $10, much less $5. There are now a lot more "penny stocks" under $5, with no quick fix or magic rabbit ready to be pulled from under the hat.