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To: LLCF who wrote (148771)	2/5/2002 10:55:52 AM
From: reaper	Read Replies (1) \| Respond to of 436258

<<The accounting matters have been settled. There were none>> DAK -- that guy could NOT be more incorrect. The accounting issues are very real, and very serious. Elan has for years inflated their P&L by structuring off-balance-sheet R&D vehicles; see VERY good article on the whole mess in the WSJ last week. My personal opinion is that the revelation of their aggressive (but perfectly legal) accounting and their announcement of a 2002 earnings miss are intimately related -- i.e. mgmt. realized that their gig had been exposed, they couldn't book phantom revenue from the off-balance-sheet R&D ventures, so they decided to not do it any more but had to take down numbers as a result. I would note that the Chairman/CEO and Vice Chairman are both former accountants. Accountants running a DRUG company; yeah, there are no funny accounting games going on there <g> That said, as noted in prior posts, there is SOME real cash flow here, enough to support a market cap maybe 25% higher than current levels. That's my target for a sale. If that guy thinks he's going to get a double, he seriously over-estimates the true cash generation potential of this business, and/or their ability to fool investors twice. Cheers