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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: r.edwards who wrote (86350)	6/26/2002 12:11:37 PM
From: pvz	Read Replies (1) \| Respond to of 99280

It's a huge no-no. In fact, that's pretty much what Nick Leesson did to bring down Barings, except he did it with trading losses which are a little different from operating expenses, admittedly. Still it's the same idea.

To: r.edwards who wrote (86350)	6/26/2002 12:14:27 PM
From: Zeev Hed	Read Replies (3) \| Respond to of 99280

It is outrageous in that it shows them earning money when they have none, they spend money which they call Capex, while it is servicing equipment. The investor believe that capex expenditure increases their capacity, by a billion or more, while it is really a yearly expenditure on maintenance. From a cash flow point of view it is stupid, since they paid taxes on this "extra income". It is just to manipulate the stock price, and that is a bad sign. The problem with QCOM is that a lot of their existing "assets" may have to be written down drastically (not only by that amount, but also by greater amounts that are circuits worth much less today than when they were installed). Zeev