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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: Charles Tutt who wrote (71892)	7/31/2002 12:31:17 PM
From: jonkai	Read Replies (1) \| Respond to of 74651

I don't think it is uncommon or in any way problematic that tax accounting and GAAP accounting diverge. it is not uncommon.... the problem comes when a company's Tax reporting is so divergent from its GAAP reporting, that a shareholder looking at the two books would think they are different companies...... that is when it becomes problematic.... most company's two books look uncannely the same...... where MSFT actually showed the IRS huge LOSSES one year, and instead the Shareholder it showed earnings....... not even Amazon or Yahoo, or most DOT.Coms where doing that, they were showing losses to both shareholders and the IRS...... that is the problem........ if you asked the average Joe six pack on the street where MSFT's real cash flow was coming from... they couldn't tell you that a lot of it is coming from MSFT selling its own stock certificates on the open Market.... and the tax rebates that MSFT is getting that the average Joe has to make up for by paying more income taxes.... they couldn't tell you that MSFT paid less taxes to the federal government one year, than the average Joe's local barber...... they couldn't tell you that MSFT would make more money by putting their entire Market cap into Treasury bonds, rather than what MSFT is making in earnings..... that is the problem...... a very problematic problem...... it will cost this economy dearly.... it already has... MSFT itself was responsible for the bursting of the tech bubble..... by showing these Dot coms how to take advantage of poor GAAP reporting..... jon.